ABP and Fane Valley’s Slaney deal approved by European Commission
The European Commission (EC) has approved the joint acquisition of Slaney Foods JV and Slaney Proteins by ABP Group and Fane Valley.
Following an investigation under the EU Merger Regulation, the EC concluded that the proposed acquisition would not adversely impact competition.
The EC’s investigation focused in particular on: the impact of purchasing of live cattle for slaughter in Ireland by ABP and Slaney Foods JV; the purchasing of live sheep and lambs for slaughter in an area encompassing Ireland and Northern Ireland by ABP, Slaney Foods JV and Fane Valley; the sale of fresh beef, lamb and mutton in Ireland; the sale of fresh lamb and mutton meat in Belgium, including to supermarkets by ABP and Slaney Foods JV; and the collection of animal by-products, generated by the slaughtering activities, in Ireland by ABP and Slaney Foods JV.
In its investigation, the EC assessed any potential increase of the slaughterhouses’ buyer power that might be of detriment to farmers. It found that farmers in Ireland tend to sell within a broad geographic radius and that they are able to switch slaughterhouses, if they can get better prices for their animals. Various slaughterhouses with spare capacity will continue to operate in Ireland, including in the southeast area, where the Slaney Foods JV cattle slaughtering facility is located, so the EC found that farmers will continue to have sufficient alternative buyers for their animals after the merger.
The EC also assessed the potential impact on competition relating to the sale of fresh meat. The investigation found that a number of strong competitors will remain active after the merger and that the parties will not be able to increase prices or impose detrimental conditions on retailers and industrial meat processors and ultimately on consumers.
Regarding the collection of animal by-products, the EC found that the volumes of animal by-products that competing renderers currently collect from the Slaney Foods JV/Fane Valley are modest. The investigation also showed that, after the merger, rendering plants would continue to have sufficient access to animal by-products.
The EC also found that the transaction was unlikely to have a negative impact on slaughterhouses in relation to their disposal of animal by-products.
ABP Food Group and Fane Valley Group both welcomed the decision by the EU Commission to approve the joint venture.
Frank Stephenson, CEO ABP Food Group, said: “The joint venture will enable both ABP and Fane Valley, through the Slaney Foods joint venture, to grow our respective businesses by bringing a stronger product offering to international markets where we compete with much larger global players.
“The decision, which follows a thorough evaluation by the directorate-general for competition at the EC, will allow the parties to enhance an already highly competitive beef processing sector in Ireland and to grow their main export markets through the JV. This transaction has always been about securing better international markets for meat products and developing an industry that needs to evolve to remain relevant and compete effectively on the global stage.”
Trevor Lockhart, CEO Fane Valley Group, added: “This is a positive outcome for the respective businesses and a step in the right direction for the red meat industry in Ireland. It is imperative for the long term sustainability of the sector that we develop highly effective business models that maximise the opportunities to sell quality beef and lamb from Ireland in the international marketplace. That has been the combined goal of ABP and Fane Valley from the very outset.”
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