THE High Court was told yesterday that since the BSE crisis there had been an enormous upturn in the poultry business.
But counsel on behalf of a large number of Monaghan chicken "growers" claimed that their margins for this year were much worse than any other year. The growers claimed that any downturn in the market tended to be passed on to them but any upturn was not passed on.
Mr Hugh O'Neill SC, for the chicken growers, claimed that Monaghan Poultry Products Ltd (MPP) had abused its dominant position in the market. His clients were seeking compensation for unfair deductions in prices paid for chicken flesh by MPP over the years.
The company denied it occupied a dominant position or imposed unfair purchase prices on growers; denied it would not permit growers to negotiate directly with millers for the supply of feed or that it had made unfair profits at the expense of growers.
If the growers had received the prices for chickens which they (the growers) contended, then the company would be insolvent the defence maintains.
The hearing is expected to last for more than four weeks.
Mr O'Neill told Mr Justice Shanley that it cost between £80,000 and £90,000 to build and equip chicken houses. Chicks were bought from MPP and reared to between five and eight weeks old when sold to MPP.
Feeding meal was the major cost to the grower, representing 70 to 73 per cent of overheads and the cost of buying chicks was another 12 to 15 per cent.
MPP had insisted since the 1970s that all meal be purchased through the company from four specified millers.
Mr O'Neill said that since the growers began legal proceedings the millers had agreed to supply directly to the growers. That did not get over the requirement to supply through MPP and that was an anti-competitive practice.
MPP had a substantial "mark-up" on the meal - in the region of 25 per cent. Between 1992 and 1995 growers were charged £266 per tonne, but the cost to MPP from the millers was in the region of £210 per tonne a £50 mark-up per tonne.
Mr O'Neill said they were talking about a profit of £1.2 million to £1.3 million to MPP over the period for simply making phone calls.
To a certain extent, Mr O'Neill said, growers were compensated for the mark-up by being paid more than the market price for flesh". Growers had found it difficult to have their complaints about poor quality processed through MPP.
The company, since the end of last year, had reduced the price of meal, but had made a corresponding reduction in the price paid to the grower for "flesh".
Mr O'Neill said growers claimed MPP operated a series of deductions which in effect brought down the price for "flesh".
One related to the purchase by the company of forklift trucks to collect chickens. The growers claimed they had paid for the forklifts over and over again. The deduction had been abolished in November 1993, but was built into a reduced price paid to growers.
There was also a "litter" deduction to compensate for any overweight caused by litter attached to modules" containing chickens. There had been a "factory" deduction because MPP had said it had to bring the factory to EU standards and wanted growers to pay for that.
Mr O'Neill said it was the arbitrary manner by which deductions were imposed which showed MPP were abusing their dominant position. He also said that a "currency" deduction had continued long after the currency crisis was over.
MPP might claim not to be able to meet grower demands, but the growers claimed that, if the company found itself in that situation, it was of its own making.