Delegation fails to make an impact

A high-powered delegation from the Irish Thoroughbred Breeders Association (ITBA) and the Irish Farmers Association (IFA) returned from Brussels after making a case for the retention of the stallion tax exemption last week.

The six-person delegation led by ITBA chairman Dermot Cantillon was disappointed with the response it got from Agriculture Commissioner Marion Fisher Boel who did not accept that the entire European sector was now under threat.

The abolition of the tax exemption could have far-reaching effects on the industry here, possibly with some of the top stallions being sent to more tax-friendly countries.

However, it is not only the thoroughbred industry that needs to be concerned with the EU moves.

The Irish Sport Horse and greyhound breeding industries will also be hit if the EU does not authorise the exemption as a State aid.

The meeting was the first opportunity the sector had to put its case to the Commission.

A comprehensive submission was made by the sector to the Irish Government last March.

The ITBA argued that the exemption should be authorised if it was declared to be a State aid, primarily on the grounds that there is no evidence to hand that the scheme distorts, or threatens to distort, competition.

This argument was backed up by Chairman of the European Thoroughbred Breeders Association, Dr Franco Castlefranchi, who was part of the delegation and said that his members unanimously supported the continuation of the Irish scheme because "it was felt that the loss of the top stallions to Ireland would also be a great loss to all European bloodstock breeders''.

He urged the Commission not to disturb the status quo. However, this if-it's-not-broken-don't-fix-it request fell on deaf ears.

Commissioner Fisher Boel said that she had to apply the EU's State aid rules in a strict manner across all Member States, and her services had, accordingly, written to Member States about comparable or similar schemes that may exist.

The Association is now in the unenviable position that it will be difficult to engage in meaningful negotiations not knowing the Commission's attitude to comparable schemes.

The ITBA now fears that a unilateral decision on the Irish scheme, taken in advance of the completion of the other investigations, could have the effect of distorting competition.