Legal action over beef supplies resolved

Wednesday 17 September 2003 17.01

The Tánaiste and Minister for Enterprise, Trade and Employment, Mary Harney, has welcomed the decision on the part of Goodman Holdings to withdraw its legal action against the State relating to beef supplies to Iraq.

Legal proceedings were initiated against the State by the company in 1989 following a decision by the then Minister for Industry and Commerce Des O'Malley to cancel export credit insurance on the company's sales of beef to Iraq.

Approximately €100 million was claimed against the State, in addition to costs and damages.

The State has agreed to withdraw a related smaller action which it had initiated against the company. Des O'Malley has described the settlement as a very satisfactory agreement.

Larry Goodman has been Ireland's largest beef processor since the late seventies, but he became the key figure in the long running Beef Tribunal in the early nineties.

He was seen to have an extremely close relationship with the new Haughey government in 1987, and they were accused of giving him favourable treatment.

Shortly after coming into office, they agreed to underwrite a huge beef contract which Mr Goodman had secured in Iraq ,where Saddam Hussein was in power.

It was worth $134m and ministers backed the deal by giving him export credit insurance.

This effectively left the taxpayer exposed if the Iraqis renaged on payments.

And indeed there was huge risk involved. Iraq had been at war with Iran for several years, and trouble was looming with Kuwait.

However, PD Leader Des O'Malley cancelled the £75m policy after he went into coalition with Haughey.

Mr O'Malley said that some of the beef for the contract had been sourced outside the country, and therefore not creating jobs and opportunities at home.

Goodman said the cancellation contributed to the firm's collapse into examinership in 1990 when the Iraqi customers defaulted.

Mr Goodman later regained control of the company when he bought out the shareholders who helped him restructure the group.

The whole issue of the export credit insurance policy for Goodman later led to sharp exchanges at the Beef Tribunal between Des O'Malley and Taoiseach Albert Reynolds who as Minister for Industry & Commerce had granted the policies.

The bitterness resulting from those exchanges contribued to the collapse of the FF/PD coalition in 1992. And the Goodman issue remained a difficulty during the Reynolds Spring goverment for the next two years.

Today Larry Goodman remains one of Europe's biggest beef processors, and with the end of his legal battle with the Government, he can now concentrate on becoming even bigger.