7 September 2001

BPCurges processing fight-back

DONT give up on processing potatoes, urged the BPC at British Potato 2001. Low cost imports may have flooded into the UK, but Continental growers make no money doing it and now face big problems themselves.

Recent visits to France, Belgium and Holland show most imports arrive at below the cost of production, says BPC supply chain manager Paul Turner.

"They are not gods of potato production. There was nobody there that wasnt losing large amounts of money," says colleague Damian Baker.

Haulage costs

Imports selling for £74/t may have incurred up to £40/t haulage and handling costs. But over-production means many Dutch growers prefer £34/t for export to £10/t for stock feed. Earlier this year, protesting Dutch growers complained they could not survive at £63/t.

Losses are starting to bite. "Crop area is 10% down this year and there are growers going out of the crop every day," says BPC chairman David Walker.

Getting Continental growers to understand how much they are losing on processing potatoes is now a key aim for the BPC, he adds.

Relationships with processors are already at an all-time low, with disgruntled growers dumping the crop at factory gates in frustration. British growers now need to exploit that, says Mr Turner.

"Our ability to work with processors is a real strength. We need to work together to take costs out of the entire production chain. European producers do not have that relationship, they have been growing a commodity and are geared up for that. They cant fine tune production like we can.

"It feels rough, but there is an opportunity to catch on to, because this market is expanding."

With processing potatoes accounting for 40-45% of the UK market and growing at 4%/year, the sector is set to dominate by 2005. Ensuring UK crop meets that growing demand is a key goal for the BPC, says chief executive Nigel Jupe.

Benchmark move

A new benchmarking initiative with Andersons and Bidwells launched at the British Potato 2001 aims to focus attention on production costs throughout the supply chain.

"We can and will compete," says Mr Walker.

&#8226 See next weeks FW for more news from British Potato 2001. &#42

PROCESSINGPRESSURE

&#8226 4% processing growth/year.

&#8226 Set to overtake fresh by 2005.

&#8226 Imports below cost of production.

&#8226 Major problems in northern Europe.

&#8226 Scope to retake market share.