Renderers threaten action over profiteering claim
By Johann Tasker
TWO of the countrys biggest renderers may take legal action after an independent report accused them of making high profits out of the BSE crisis.
The report, published by consultants London Economics, has received praise and heavy criticism from various farm leaders since its release last week (News, July 3).
The report said renderers were largely to blame for the increased gap between farm-gate beef returns and retail beef prices in the wake of the BSE crisis. It said the monopolistic nature of the UK rendering industry meant renderers could pass on BSE-related cost increases to their customers without losing business.
Representatives of William Forrest & Son, the biggest renderers in Scotland, are now examining the report. And officials at Prosper de Mulder, the biggest renderer in England and Wales, have called in the lawyers.
We are considering whether to take legal action, said Paul Foxcroft of Prosper de Mulder. We will take a considered opinion and will go through the report very carefully.
The report, which was prepared for Tesco by London Economics, said: Everyone bar the renderers suffered. Prosper de Mulder, in particular, has a reputation for aggressively protecting its market.
Farm leaders welcomed the report for drawing attention to the collapse of farm-gate beef prices, but they questioned its main findings which cleared supermarkets of profiteering from farmers misery.
It was no coincidence that a Tesco-commissioned report should blame someone else, said Bob Parry, president of the Farmers Union of Wales.
The results of this survey were predictable. Senior Tesco management are on record as saying that they make no profits and now their own survey backs up this claim.
Jim Walker, vice-president of the Scottish NFU, questioned the reports claim that some supermarkets were actually losing money on beef. But he urged producers and retailers to work together.
We are not against supermarkets – that would be short-sighted, he said.
Simon Trussler, the senior consultant at London Economics who wrote the report, agreed it was in nobodys interest to cause problems along the beef supply chain. We have said that renderers kept making high profits after BSE but there is no evidence that those profits actually increased to excess levels, Mr Trussler said.
NFU leader Ben Gill said it was difficult to determine reports accuracy. The complexity of the beef chain and commercial considerations prevent the picture painted by the report being totally clear.