29 May 1998

North-west marts hope to pool their resources

By Jeremy Hunt

SEVERAL north-west auction marts are considering merging their resources – a move that could set a precedent among livestock markets throughout the country.

Those supporting a regional auction group believe the concept is critical to the survival of the auction system as it comes under increasing pressure from the influence of supermarket buying and deadweight marketing.

Lancashire dairy farmer Richard Halhead is chairman of Lancaster Farmers Auction Mart, a farmers co-operative with an annual turnover of around £22m. He spoke exclusively to farmers weekly about the possible move, as informal talks between several of the regions auction marts continued this week.

"Within a 30 mile radius of Lancaster Auction Mart there are ten livestock markets operating either one or two days a week. The sensible option must be to consolidate resources and administration to one main regional centre which could then service all the markets in a group.

"This would be more cost effective and more efficient. It would provide a broad spread of professional expertise to all the markets involved through central administration and the use of the latest information technology," says Mr Halhead.

"I am under no illusion that to form one regional company would be a demanding task for all concerned. If each market retained its site and its name but sourced all its services from the parent management company, that may appease those who fear local marts may lose their identity."

Heavy losses

Mr Halhead says many auction marts face heavy losses this year following depressed livestock prices. The imposition of strict credit controls has been difficult at many markets for fear of losing potential buyers to other rival auction companies.

"A uniform credit policy operating throughout the proposed regional group would eliminate the heavy losses suffered from bad debt, incurred most commonly in the primestock sector."

Beef and sheep farmer Joe Atkinson who farms at Scorton, Garstang, Lancashire said it was essential that a viable live auction system was retained in the UK.

Supermarkets effect

"Supermarkets are controlling the pricing system of livestock. As they take the best on deadweight they encourage poorer quality animals to go through the live market. This artificially achieves a lower buying price based on live sales."

Robert Towers who runs beef and sheep at Camp House Farm, Farleton, near Lancaster, said: "Livestock markets are not just about selling stock. They are a meeting point for an exchange of views on a host of issues that affecting the industry. Live selling is a fundamental part of British livestock farming. If it is lost we are playing into the hands of the supermarket monopoly."

Richard Halhead:Many auction markets face heavy losses.