26 April 1996

BSE crisis felt on the Continent

By Philip Clarke

EVEN though Continental meat traders have made good use of beef intervention, prices in Europe continue to suffer.

Beef reference values reported to Brussels at the end of last week suggest some bottoming out (see graph). But throughputs are still substantially reduced as consumers resist the product and producers keep hold of their stock.

Official figures put consumption in Italy down by 30%. But British Meats man in Milan, Marc Perricone, believes the drop is closer to 60%, despite government efforts to establish an "Italian meat" brand and retailers knocking 20% off prices.

Abattoirs are running at half capacity, he says, though some of the slack has been taken up by a 20% increase in pork consumption and 38% rise in poultry.

"Even though government and scientists have been trying to reassure consumers, they have no credibility," says Mr Perricone. "There is a psychosis against red meat and even lamb has suffered."

Cattle breeders are reportedly in a state of panic as most of their trade is in veal and young bulls which lose value rapidly as they mature. As such, Italian farmers set up road blocks in the Brennero pass last weekend – the main route in for imports from Germany.

This disruption to exports has compounded the drop in consumption already experienced in Germany. According to British Meat representative in Frankfurt, Renarto Riedl, retail sales are still back by 35% to 45%, leading to substantially-reduced abattoir throughputs and weaker producer prices.

For example, young bulls in Bavaria, which were fetching 137p/kg in March, are now valued at 127p/kg.

Producer prices in France, meanwhile, have staged a partial recovery. But this merely reflects the substantially reduced throughputs at abattoirs, says British Meats Remi Fourrier. Cattle slaughterings have dropped 43% since March and veal by 8%. And while some of this has been replaced by a 32% increase in sheep slaughterings and a 2% rise in pigs, overall activity in the meat sector is down 20%.

Having initially slumped by 40%, consumption is still down 25% since before the BSE-crisis, though there are some positive signs. "Consumers are buying more beef, firstly because BSE is no longer on the front pages, and secondly because they are fed up with eating pork and poultry," says Mr Fourrier.

But one in three French meat plants, and one in three abattoir sector jobs are still in jeopardy, he adds, despite government efforts to boost sales with its Viande Bovine Francaise initiative.

Ireland – which exports 90% of its output – has had its problems compounded by the closure of north African markets to all EU beef, and the loss of the UK trade for beef from animals over 30 months old.

Part of the problem has been solved by Egypt lifting its ban, re-opening an annual trade worth £300m. Domestic consumption is also almost back to normal, though returns to producers remain depressed. &#42

Remi Fourrier:

French consumers are getting fed up with eating pork and poultry.