Meat processing sector’s viability falling even pre-Covid, Ictu says

Meat processors’ and Government policy has taken a ‘low-road’ approach in recent years

Irish Congress of Trade Unions’ policy paper on Ireland’s meat processing sector  recommends  business support measures be made “conditional on trade union recognition and access”.  Photograph: Angus Mordant

Irish Congress of Trade Unions’ policy paper on Ireland’s meat processing sector recommends business support measures be made “conditional on trade union recognition and access”. Photograph: Angus Mordant

 

The model operated by the Irish meat processing sector was becoming less and less viable on its own terms even before the Covid-19 pandemic hit, a new report commissioned by the trade union movement has concluded.

The report says increases in turnover and in employment in the Irish meat processing sector over the past decade have been accompanied by low investment, low value added and low wages, “as well as apparently declining levels of profits over recent years”.

It says the business model was based on very substantial public funding and support but that this was provided “with very few conditions relating to the promotion of decent work, social dialogue, collective bargaining and tackling social externalities such as low pay, precarious work and poor social benefits”.

It urges the implementation of the recommendations of the Oireachtas committee on Covid-19 last year “particularly those concerning the introduction of sick pay, reviewing the role of employment agencies, establishing a task force to examine the terms and conditions of workers in this sector, legislation banning subcontracting and bogus self-employment and adopting a licensed direct employment model”.

Sustainable future

Launching the Irish Congress of Trade Unions’ policy paper on Ireland’s meat processing sector on Thursday , its general secretary Patricia King said the Government and meat processors needed to adopt a new approach to meat processing and to meat processing workers in particular if it was to have a sustainable future in Ireland.

The report maintains that meat processors and Government policy for this sector has “taken a ‘low-road’ approach over recent years”.

“While turnover and employment both rose by 40 per cent in the decade after 2008, investment levels remained low, leading to stagnating turnover and low value added per employee – all against the backdrop of low wages and social security contributions and benefits.

“The low-road approach has not only meant low pay, precarious employment and poor working conditions but left this sector highly exposed to Covid-19, with the European Centre for Disease Control identifying Ireland as one the countries that has seen ‘multiple outbreaks in slaughterhouses and meat processing centres, and means that this sector is unable to optimise the benefits to the wider economy in terms of value-added and investment’.”

The report says meat processors can avail of general government supports to business as well as sectoral supports provided by agencies such as Teagasc and Bord Bia.

Specific supports

“They receive specific supports such as the Beef and Sheepmeat Investment Fund (ie €52 million between 2009 and 2018) and investment for meat and dairy processors impacted by Brexit (€200 million between 2020 and 2025). They also benefit indirectly from EU supports to primary producers (eg €1.2 billion in 2019 under the Basic Payment Scheme).”

The report recommends that the provision of business support measures be made “conditional on trade union recognition and access”.

The report says that Eurostat data indicates that turnover in the processing and preserving of meat in Ireland amounted to just under €4.37 billion in 2017, the most recent year for which data is available, up from €3.16 billion (39 per cent) in 2008, the first year for which data is available.

It says there were just over 11,700 people employed in the red meat sector in 2017, up approximately 3,400 (41 per cent) on the figure in 2009.

“However, turnover per person employed, at €372,000 in 2017, was 2 per cent below the 2008 level of €379,000. This compares unfavourably to an increase over the same period in most of the peer countries.”

The report says “personnel ‘costs’ per employee in Ireland stood at €33,800 in 2017, the third-lowest of the peer countries, after the UK at €29,700 and Germany at €32,000”. It says these figures compared with €60,400 in Denmark and €51,900 in Sweden.

Sick pay

“While profits as measured by gross operating surplus as a percentage of turnover in this sector are slightly above those of most other peer countries, they do appear to have been declining over recent years – down from 6.3 per cent in 2014 to 3.2 per cent in 2017,” the report says.

Siptu manufacturing division organiser Greg Ennis, who helped produce the report, said: “Only one in five meat processing workers receives sick pay and one in five of all meat processing workers in Ireland has contracted Covid-19 since the pandemic began.”

Ms King said: “The report highlights that not only was Ireland’s meat processing business model not working on its own terms, as evidenced by stagnating turnover per employee and value-added per employee due to under-investment, it was not working for beef farmers, and most certainly not working for meat processing workers, who have to endure low pay and poor working conditions.

“The fundamental weaknesses and frailties of this model were laid bare by the way in which Covid-19 hit meat processing in Ireland worse than in many other countries.”