After years of speculation, Dawn Meats is believed to be making its move to take over Kildare Chilling.
It is the second largest beef processor outside the main groups and the third largest lamb processor in the Republic of Ireland.
It would also mark further expansion by the Dawn Group under the leadership of Niall Browne, having completed the take over of the Dobson family-founded Dunbia Group in 2020. This added Dunbia’s Slane factory to the Dawn Group, while the Dawn factories in the UK moved to operate under the Dunbia brand.
Kildare, moving into the Dawn Group of companies, would be the loss of the second largest standalone beef processor and would follow the loss of the largest, Slaney Foods International. It became fully part of the ABP Group in 2021 after a five-year joint venture with Fane Valley, the Northern Ireland-based farmer co-op.
The ABP move on Slaney was strongly opposed by farmers when the joint venture was announced in late 2015 and the IFA commissioned an impact assessment on how it would reduce competition in the south Leinster area. Despite the protest, the deal was approved by the EU competition authorities
.Kildare Chilling is geographically located between Dawn’s Rathdowney factory in Co Laois and its Navan factory in Co Meath. Any deal will attract the interest of the Competition and Consumer Protection Commission (CCPC)
Beef and sheep farmers will see the loss of Kildare Chilling as a standalone factory as a blow to competition for Irish cattle and sheep. It has the capacity to handle 120,000 cattle but has been handling just over half of that in recent years alongside 500,000 sheep. However, if it becomes part of the Dawn Group, it and ABP will have all the larger price-reporting beef factories handling over 20,000 cattle annually in the south and east Leinster area.
Kavanagh’s in Enniscorthy and Ballon Meats are under this threshold.
It will be even more significant in sheepmeat processing. Already, ABP and Dawn’s Dunbia factory have over 95% of the processing in Northern Ireland.
The move of Kildare into the Dawn Group would mean that close to 95% of sheepmeat processing would be controlled by ABP, Dawn and Kepak in the Republic of Ireland.
Dawn, through Dunbia, is also a huge lamb processor in Britain with one of the top factories in Europe in Llanybydder, mid-Wales, as well as lamb processing capacity at its Preston and Carnaby factories in England.
Consolidation - good or bad?
Farmer instinct is to oppose large factory groups taking over independent operators, seeing it as a loss of competition in buying livestock.
Looking at this week’s factory leagues on pages 22 to 25, we can see that it is mainly factories outside the large groups that top the tables in paying for cattle.
Jennings is a regular table-topper, but like the others is a speciality business with a strong Aberdeen Angus element inflating prices. Similarly, Dunleavys and the Traditional Meat Company top all the young bull leagues.
However, across the 16 categories examined by the Irish Farmers Journal, Kildare Chilling didn’t feature at the top end of the table. While ABP, Dawn and Kepak may not have topped many tables, they all featured prominently in the top half across several categories in paying for cattle.
A factory at every crossroads doesn’t in itself guarantee strong competition for livestock.
In fact, too many can mean inefficiencies.
It is also a reality that many factories outside the main groups trade extensively with the main groups for carcase beef and vacuum-packed cuts for further processing.
Also, new players have emerged in recent years such as C&J, Traditional Meat Company and Dunleavys.
Yet, there is a balance. In the US, the administration is funding new entrants as beef and pigmeat processing there is consolidated to the extent of four groups handling 85% of production.
What would be of most interest and best service to Irish farmers is greater transparency in the processing sector and we await with interest to see what the regulator will deliver here when appointed.