12 June 1998




Ripon, North Yorks


Norman Bagley

WITH supermarkets turning the screw on livestock marts, farmers are now more vulnerable than ever, says Norman Bagley.

His comments follow Tescos announcement that it plans to buy all cattle and sheep direct – completely bypassing auctions – within two years. If supermarkets think auctions dont have a useful role, says Mr Bagley, why do they still use them so much now?

"Farmers have their backs against the wall, financially, and the lure of the short-term buck is, for many overwhelming. But this short-term gain will, as history proves, result in the classic long-term stitch up.

"The dangers of being subservient to one all-powerful sector have been well demonstrated last week with the news that the countrys largest pig slaughterer, Malton Bacon Factory, is to axe its long-standing AAPP-related contract. This will mean a move to a more "spot-price" related structure, possibly with week-to-week pricing, just like auctions.

"These pig producers have been forced to jump through hoops to meet upgrades in welfare requirements. And their bonus? To be told pigs can be bought cheaper elsewhere, irrespective of the welfare implications."

Mr Bagley also questions research cited by Tesco, supposedly showing customers preferred meat from cattle bought direct from farms rather than from livestock auction.

"Whose research is this and whose questions? Let us have independent, verifiable evidence. Other surveys give the opposite view, putting prices, colour, fatness and packaging before welfare.

"And who says direct from the farm is more welfare friendly, anyway? It can involve an all-day pick-up merry-go-round, collecting three here, five there etc."

Supermarkets have only one criteria – price, says Mr Bagley. Without auction marts as a comparison, the price paid by the big retailers to the big abattoirs will be governed by the lowest price meat can be purchased elsewhere.

Auctions, he says, provide a wide range of buyers that add value to a full range of livestock – not just a narrow spec. At Ripon, for example, a typical week sees about 60 meat companies represented.

"But farmers should not just use auctions for historical reasons. We cannot expect loyalty for loyaltys sake. The sector has to give a price-competitive service. High rates of commission to cover bad credit control and self-imposed bad debts are not on. Auctions must be ruthless in their buyer appraisal and credit terms. They must get away from the syndrome of selling to any fly-by-night firm just to prop up prices."

The Meat and Livestock Commission must also allay the fears of the auctions that they have just become a promotion agency which is far too close to the large abattoirs and supermarkets, says Mr Bagley.

"The position of MLC chairman, Don Curry, who has a large foot in the Tesco camp through his chairmanship of the supermarkets supplier, North Country Primestock, needs explaining. Since NCP producers are not charged a commission, one can only deduce that a direct commission is paid by the abattoir to NCP. So who are NCP representing?" And does Mr Curry agree with Tescos view of auction marts?

The MLC, having given up providing an independent weighing and grading service, are now powerless to impose on abattoirs the one layer of visible comfort to producers – a single, universal specification standard, instead of the present four or five which include the ambiguous "company spec."

Renewed tensions between supermarkets and auctions are "regrettable" as it seemed that, post-BSE, a dialogue had developed, says Mr Bagley. "Tescos comments, however, have blown that myth to pieces.

"Tescos on-our-terms-only rules do not bode well for the most important link in our chain – the farmer, let alone the auctions."

Beware the lure of the short-term buck, says Norman Bagley.

See more