Talks between beef processors and Enterprise Ireland aimed at rationalising the processing sector have made "good progress", according to a statement from the beef sector yesterday.
However, the Beef Industry Development Society, set up by the Irish Meat Association to facilitate the implementation of the McKinsey Report of 1998 and the Government's Beef Industry Task Report with Enterprise Ireland, would not comment on reports that six meat factories may close as a result of rationalisation.
It did say, however, that the plan would be ready in the New Year, and would be submitted to the Competition Authority for ratification.
The discussions involving the major beef processors are thought to be now focused on what level of compensation factory owners closing down plants might expect from the €355 million fund available for the development of the food sector under the National Development Plan.
"Substantial progress has been made on proposals for the funding of an exit mechanism for those wishing to leave the industry," said the statement which followed its latest meeting with Enterprise Ireland.
"The work to achieve agreement on a rationalisation plan for the beef industry to the benefit of the industry as a whole is ongoing, but the implementation of any such agreement awaits the outcome of the Competition Authority review."
The so-called "exit money" has brought a warning from the Irish Farmers' Association. It said farmers had real concerns that the concentration of the beef processing sector would enable the factories to manage output and therefore prices.
The IFA president, Mr John Dillon, said the Government and State bodies, such as Enterprise Ireland, who are supporting the beef industry rationalisation plan, must recognize that cattle prices are the only real measurement of performance in the beef sector.
He said the justification for the investment of public money in the companies which own the beef industry required a strong commitment from these companies to improve cattle prices and achieve a greater penetration of the EU market.