Denis Naughten (Roscommon-South Leitrim, Independent)
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8. To ask the Minister for Agriculture, Food and the Marine the steps he is taking to develop the live export trade to the UK; and if he will make a statement on the matter. [52931/13]

Denis Naughten (Roscommon-South Leitrim, Independent)
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I tabled this question on the issue of labelling in the context of the fallout from the TLT collapse. The key issue is that a chicken fillet can be imported from Thailand, breadcrumbs put on it in the European Union and then marketed it as a product of the particular EU country. At the same time, Irish cattle cannot be processed in the United Kingdom and sold in that market.

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy makes a fair point but both pork and poultry products on sale in Ireland and across the EU will have a country of origin label requirement in future, in the same way as beef products do at the moment, which will be a very welcome development when it happens. The ground is moving on this issue.

On the issue of Irish-grown, British-finished beef and the labelling system around that, there is a genuine problem with the labelling, marketing and selling of that product in the UK. That is why beef that is being sold in the UK is generally either British beef which is grown, slaughtered and processed in the UK or Irish beef, grown, slaughtered and processed here. Moving live cattle from Ireland to finish them in the UK would be welcome from a competition point of view and would also be very beneficial to live cattle exporters from a cost perspective, given the proximity of the market. This issue has been under the spotlight this year in particular because British beef prices have been higher than Irish prices, particularly for steer beef but less so for heifers. That is because of a very strong demand for British beef in Britain. However, it is also true that the prices of Irish beef have been above the EU average for most of this year. They are now slightly below the average for the first time in approximately two years.

There is a particular labelling issue in play here. Harmonised EU rules require mandatory traceability and origin labelling for beef from slaughterhouse to point of sale to consumers with the objective of providing maximum transparency for the marketing of beef. Compulsory beef labelling requires food business operators to label fresh, frozen or minced beef with specific information to enable the product to be traced back to the animals from which it was derived and must include details of the slaughterhouse and de-boning hall in which the animal was processed as well as the country in which it was born and reared.

The problem is confusion for the consumer around cattle born and raised here but finished and processed in the United Kingdom. That is why a lot of those involved in the beef industry in Britain do not want live cattle from Ireland

Additional information not given on the floor of the House

The mandatory labelling rules prevent final retailers from describing any beef products derived from animals born in Ireland but exported live for finishing and processing in Britain as either British or Irish. Labelling of such product has to state the country of birth as Ireland, the country of rearing as Ireland and the country of slaughter as the United Kingdom. As the Irish-born but UK-finished proposition is regarded as difficult to communicate to consumers and likely to cause unnecessary labelling complications, retailers prefer to market British and Irish beef separately as part of their product mix. This effectively means, as a matter of policy, they prefer beef to be sourced from animals originating in one country only. Furthermore, meat from such animals would not be eligible for the UK’s Red Tractor scheme which guarantees the UK prevalence of the meat to consumers. In addition, logistical difficulties arise when a small number of Irish-born animals are slaughtered in a UK meat plant. These carcasses have to be deboned in a separate batch, packaged and labelled accordingly, thereby incurring additional costs for the processor.

Bord Bia actively supports the development of the live export trade through the provision of market information, developing market access and promotional activity. Although Bord Bia has repeatedly raised the labelling issue in discussions with the British retail sector, the multiples are unlikely to change their stance as they seek to shorten their supply chains in the wake of the equine DNA issue. Nevertheless, Bord Bia will continue to pursue all opportunities to maximise the value and volume of our beef and livestock exports to the UK.

Denis Naughten (Roscommon-South Leitrim, Independent)
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I would point out that the labelling law in the UK is the same as that in every other EU member state. We are shipping live cattle to other EU states with no difficulty whatsoever.

One of the issues that arose as a result of TLT going into receivership was how one retains title of ownership across EU member states. The Department has washed its hands of the issue as it relates to TLT, as has the Italian Government. In the context of the question I tabled, we can ship cattle to Benghazi but cannot ship cattle to Birmingham. It is far easier to collect outstanding money from Manchester than Milan. That is the context for my question. What can we do to retain ownership of shipped cattle and how can we deal with the labelling issue?

Simon Coveney (Cork South Central, Fine Gael)
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This is about supplying what the market wants. It is not about what we want. We must provide product that the market will pay for. In Italy there has been a demand for a certain age and quality of animal because that is what Italians want. The beef industry in Italy had a shortage of such animals. In the United Kingdom, the market wants something different. Regardless of what we want or what suits Ireland, the British beef industry has made a judgment call that British consumers want clarity in terms of labelling. Consumers want to know they are buying either British beef or Irish beef. They do not want the confusion of having both countries on the label. That is my understanding of the issue.

We must respond to the market. We export between 85% and 90% of all of the food produced on this island. We target markets where we can make a profit on the basis of what those markets want. The Libyans wanted Irish produce and so we worked hard with live cattle exporters to facilitate that in the earlier part of last year. That was welcomed strongly by the farming community because it happened at the right time and set the trend in terms of beef pricing as the year went on.

There are genuine issues in terms of what the market wants in the United Kingdom, which is the biggest market for Irish beef by a long mile. It is not, however, the biggest market for live Irish cattle. That is because of decisions being made in the UK, not decisions being made here.

Denis Naughten (Roscommon-South Leitrim, Independent)
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The Minister is missing the point. I am seeking answers to two separate questions. First, how do we retain ownership of live animals across EU borders? The Department is washing its hands of this issue and the Italian authorities are doing likewise.

Simon Coveney (Cork South Central, Fine Gael)
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I do not understand what the Deputy means when he says my Department is washing its hands of it.

Denis Naughten (Roscommon-South Leitrim, Independent)
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The Department has said that these animals are not its problem. Once animals leave the island of Ireland, their ownership is not a problem for the Department to solve. Representatives of the Italian Government are saying exactly the same. Who actually owns those animals? They have not been paid for. It is legally possible to put movement restrictions in place until they are paid for but no one is prepared to invoke that power.

I fully accept the ethos and motivation behind the UK's Red Tractor labelling scheme. If we had a big domestic market, we would do the same thing.

The fundamental problem with the UK red tractor label is that it is restricting the Common Market. That has EU implications. The issue that needs to be addressed is the restriction of the Common Market because of the label.

Mick Wallace (Wexford, Independent)
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Obviously, the export of live cattle is driven by the current price difference of approximately €1 per kilo. The average price is approximately €3.80 here and approximately €4.80 over there. Rather than promoting live cattle exports, maybe the State should do something about the probable existence of a cartel in the factory beef industry. Surely live cattle exports are a quick fix rather than a long-term solution. The collapse of TLT should serve as a warning rather than a way forward. I put it to the Minister that we need to focus on finding markets for finished products.

Simon Coveney (Cork South Central, Fine Gael)
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I agree.

Mick Wallace (Wexford, Independent)
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That would keep jobs in Ireland. It can be done by challenging the cartel.

Simon Coveney (Cork South Central, Fine Gael)
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I want cattle to be slaughtered and processed in Ireland. There are jobs in these value-adding activities. The same thing applies in the case of seafood. It is important for farmers who do not feel the factories are giving them value for money for their cattle to have an alternative outlet - to keep the factories honest, as many people describe it. That is why we welcomed the opening of the Libyan market to cattle and sheep available earlier this year. I would like the option of a live cattle trade to the UK to exist, but the market has to be given what it is looking for. I remind those who think our access to the UK market has been damaged that we will export €4 billion worth of food and drink, significantly more than we have ever done in the past, to the UK this year. Beef is a major part of that. The value of beef exports to the UK has increased in percentage terms by a double-digit figure in the last 12 months. This issue must be considered in the appropriate context. The UK is by far our biggest export market for food and drink. It accounts for 42% of our food and drink exports, which will be worth almost €10 billion this year. We are building that market. In response to the point that was made about the retention of ownership of animals being transported, I remind Deputy Naughten that we are in a receivership situation. Is he suggesting that the Department should step into the middle of a receivership situation deliberately to frustrate the process? Is he suggesting that an effort should be made to get people to hand over money to certain people who are owed money while others are ignored?

Denis Naughten (Roscommon-South Leitrim, Independent)
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No. That is not what I am suggesting. I am suggesting that the Department should assist the receiver's efforts to get as much money as possible from Italy. The Department is not prepared to facilitate that. The Italian authorities are not prepared to facilitate that.

Simon Coveney (Cork South Central, Fine Gael)
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The Department has not been asked by the receiver-----

Denis Naughten (Roscommon-South Leitrim, Independent)
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The powers are there within the EU to ensure those animals are not slaughtered until the money is paid.