Scottish Pig Producers hit by Grampian Country Food’s troubles

Price cuts and extended payment terms from the troubled Grampian Country Food Group have hit the profits of pig marketing co-op Scottish Pig Producers.

Turnover of the 150-member co-op, main supplier of pigs to Grampian’s Broxburn plant near Edinburgh, fell from £29.7 million to £27.5 million last year and profits from £8031 to £2512, as a result of a £15,285 hike in bank interest.

The co-op continues to pay for pigs within two days of slaughter even although Grampian has extended payment terms to the co-op to 10 days.

Members also took a hit when the co-op agreed last year to a 5p/kg price cut for three months to help Grampian out of  its financial problems.

“The price cut broke our pricing mechanism and took us back to weekly pricing,” chairman Sandy Howie told the co-op’s AGM. “It concerns me that we no longer have a structure for pricing.”

Pig prices were previously fixed every four weeks using a formula based on the average UK price (DAPP), feed prices and a “shout” price from the abattoir. Grampian has promised to revert to a pricing formula “when the time is right”,

A recent “head-to-head” resulted in the co-op securing a 2p/kg price rise when Grampian was looking for a 2p cut. The co-op threatened to move 1000 pigs away from Broxburn.

“We got our price, which demonstrates the value of sticking together through co-operative marketing,” said Mr Howie. “So long as we continue to produce quality, Broxburn want our pigs. They need us as much as we need them.”