Statement on Fane Valley Co-Op and ABP Food Group 50:50 Proposed JV
Fane Valley Co-Op and ABP Food Group today have confirmed that they have been informed by the Directorate General for Competition that the proposed 50:50 joint venture in relation to Slaney Foods comes under the remit of the EU for merger control assessment (subject to the normal EU merger control procedures). The relevant national authorities will be involved in the process.
Fane Valley Co-Op and ABP Food Group today have confirmed that they have been informed by the Directorate General for Competition that the proposed 50:50 joint venture in relation to Slaney Foods comes under the remit of the EU for merger control assessment (subject to the normal EU merger control procedures). The relevant national authorities will be involved in the process.
Commenting on the announcement, Trevor Lockhart, Chairman of Linden Foods (which is owned by Fane Valley Co-Op) said, “Now that the jurisdiction for regulatory approval in relation to the joint venture has been established, we look forward to a positive resolution. Further growth (internationally) is key to the long term success of the Slaney’s beef and lamb businesses and ABP with its international sales footprint is an ideal strategic fit. Both companies are top payers for quality cattle as described by the Irish Farmers Journal weekly index, and they service high end customers internationally. This is a strategic emphasis that will not change with this transaction.”
“Structural change within Irish beef processing is a fact of life in 2016 and with the beef sector becoming increasingly globalized, further strategic developments of this nature within the industry are inevitable. After carefully considering our options, we are delighted that we are partnering with ABP Food Group following the decision of our current joint venture partner to exit the business. The combined expertise and resources of Slaney and ABP Food Group will grow the businesses, deliver significant benefits and contribute positively to the sustainability of our primary production base,” he added.
Paul Finnerty, CEO of ABP Food Group, said: “There has been considerable speculation about this joint venture; however consolidation within the industry is absolutely necessary in order for our sector to remain competitive. This consolidation trend is the result of an increasingly challenging international background where we compete against global players, many of whom have processing capacity multiple times that of the entire Irish industry. We also should not underestimate the looming risks of Mercosur, TTIP and Brexit – any of which will further accelerate a more challenging market environment.
“The long term outlook is positive as global consumption of beef is expected to increase in the coming years. However, it is important that markets such as China and the US are fully open so that we can take advantage of this demand. Similar to other Irish food sectors, we also need to build strong capabilities that can compete effectively on the international stage and this transaction is a step in the right direction,” concluded Mr Finnerty.
