Serious questions have been raised over the tender process for the €20m national cattle tag contract.

Mullinahone’s Eurotag division is run by former IFA county chairman Liam Egan, who said that he left the organisation when he joined the Tipperary co-op in 2000, “to ensure that I didn’t have a foot in both camps”.

A statement from the Department of Agriculture said that it had opted for a single supplier which followed the wishes of both the IFA and ICMSA.

While the IFA had no comment on the issue, the ICMSA said that they supported the single supplier system because it ensured tags were supplied at the best possible price. The ICSA expressed a preference for multiple suppliers on the basis of the competition provided between tag suppliers.

However, the Department believes that a single supplier is the best way of supplying tags at a “competitive price”

The statement added that it placed “a strong reliance on tag suitability, security and tamper evidence to support a secure bovine identification and traceability system that plays a key role in underpinning beef and dairy exports in a competitive marketplace”.

In response, Fianna Fail’s Éamon Ó Cuív said that the insistence by the Department on limiting the contract to one supplier “is a totally wrong decision and should be opposed”.

Cormac Tagging, who are one of the three main suppliers of sheep tags in Ireland, point out that sheep tags have become 35pc cheaper during the last 14 years, even though there are more than three suppliers approved by the Department. The Tuam-based supplier claims that their German-made Caisley tags have a proven loss rate of just 2pc across Europe.

The French tag manufacturer, Allflex, is the supplier of 100pc of the tags approved for use in the Irish cattle herd. Loss rates in Ireland are at 4pc, according to Eurotag’s Mr Egan.

Several suppliers are approved to supply cattle tags in the UK, where prices range from €2.69-3.08 per tag. The equivalent tag here costs €2.70.

Mr Egan defended his firm’s success in winning successive contracts, saying that they submitted very detailed tenders each time.

“I don’t think that other suppliers would be able to cope with the demands, and a multiple supplier scenario would see the introduction of a two-tier price structure where smaller farmers wouldn’t get the benefits. Competing suppliers would only be interested in cherry-picking the biggest customers,” he said.

When asked how a multiple supplier system was working for sheep tags, he claimed that Eurotags had set the price for the market at the lowest possible rate that had a “beneficial effect for all farmers”.