8 September 2000

IDENTIFYING and implementing ways to improve the market share of lamb and mutton must dominate the thinking of the whole supply chain if the Scottish sheep industry is to survive.

A new report on the way forward for Scotlands sheep industry, commissioned by Scottish farm minister Ross Finnie and compiled by Andrew Dewar-Durie, former chairman of Allied Distillers, concludes that there is no future if the industry fails to change.

Scotland produces 400% more lamb than it consumes. Of the 3.6m finished lambs sold in 1999, almost 40% were slaughtered outside Scotland a lost opportunity, says Mr Dewar-Durie.

And about 90% of Scotlands exports are in carcass form. Few Scottish lamb processors are involved in added value activity, he says, adding that ways must be found to redress this and deliver greater profitability.

The Scottish sheep industry needs to decide what business it is in and, therefore, whether its future lies in continued reliance on producing and selling lamb and mutton in a traditional way, or whether the future lies in marketing lamb in a much wider variety of forms for the convenience of the consumer, says the report.

Mr Dewar-Durie says a more radical approach is urgently needed.

France accounts for about 70% of Scotlands total export sales. Yet fewer than 50% of the lambs sold meet Eurospec standards for export. Exporting is not a convenient overflow for surplus stock, says Mr Dewar-Durie, adding that it is a specific market.

Lamb consumption across Europe is falling. And the fall among the young is related to the fact that lamb is not presented as a versatile, convenient product, he says. But the catering market is bucking the trend, offering Scotlands sheep industry a major opportunity to increase sales.

Mr Dewar-Durie says that overall, a comprehensive and innovative marketing strategy, clearly communicated and understood by all levels of the industry, is essential to find ways of positioning branded Scottish lamb at the top of the quality spectrum.

Developing producer-processor supply contracts would help greatly in the flow of information on customer requirements throughout the supply chain, he adds.

Slaughterers and processors need to work with others in the chain to improve product consistency and develop new products.

Sheep pass through too many hands, says Mr Dewar-Durie. With only 25% sold deadweight, this adds significant cost and masks market signals. If the industry is serious about matching supplies to market requirements and about stripping costs from the system, other approaches need to be developed. l Further details on page 39.