Meat industry told to share margins with farmers

12 March 1998

Meat industry told to share margins with farmers

THE meat industry should share some of its margins with beef farmers to
ensure retention of a viable British beef sector, said Brian Montgomery, a NatWest agricultural specialist.

He said farmers had to play their part by examining their production systems and producing what the market wanted in terms of quality, assurance and traceability.

But he told his audience at the opening of the Beef for the Market event
at the National Agricultural Centre, in Warwickshire, that retailers and the
rest of the meat industry must support farmers otherwise they would lose many beef producers.

He ruled out as “lost causes” the likelihood of additional help from the
European Union or the Government.

Richard Cracknell, managing director, of Anglo Beef Processors, predicted a substantial shake-up in future market operations in the beef sector.

Tension in the beef industry is almost “unbearable” writes The
as processors and supermarkets try to maintain margins. It means forcing the price of prime cattle down further.

The major supermarket chains are under pressure to start buying Irish beef again because of the price difference, despite their commitment to the local market. The Irish average price is 74.13p per live kilo, the British price 86.71p.

Speaking before the Commons Welsh affairs committee, representatives of Safeway, Tesco and Sainsburys denied profiteering at the expense of livestock farmers.

Supermarket bosses said low consumer confidence, higher costs throughout the food chain and the current strength of sterling were the major factors dragging down profit margins.

Barry Martin, Safeways meat-buying director, said the supermarket bought all its beef from British suppliers.The main reasons for low farm prices relative to supermarket prices were the result of increased abattoir costs, equivalent to another 44p a kilo, he added.

Sainsburys pointed out that the loss of export markets and additional meat hygiene costs faced by abattoir owners had added about £100 per animal to its suppliers costs, which had resulted in their prices to the supermarket rising by 12%.

  • The Scotsman 12/03/98 page 30

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