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House of Commons
Wednesday 13 November 1996
The House met at half-past Nine o'clock
PRAYERS
[Madam Speaker in the Chair]
Cattle Head Deboning Industry
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Knapman.]
9.34 am
Mr. Peter Viggers (Gosport): When the BSE tragedy struck this country, I shared with my constituents a sense of distress for the cattle involved and for the agriculture community. I little thought that the BSE problem would have an immediate impact in Gosport, because it is not an agricultural area. We Gosportians--I grew up there, and I have represented the area for 22 years--are proud of our constituency, but the last thing we would claim for it is that it is an agricultural area. One will not see a pig or a sheep in Gosport. We have hardly a horse, scarcely a cow and only a handful of goats.
Because we have so few agricultural animals, we value Felicia park at Forton, which is a mildly eccentric and totally delightful farmlet where children can see live farm animals. Without that opportunity, they may not know what farm animals look or smell like in the flesh. I hope that Felicia park will continue, despite the development in that area.
It was, therefore, a surprise and a shock to receive a plea from a local firm for help following the BSE scandal. Pinnacle Meats has a serious problem: proportionately it is the worst problem of anyone affected by the BSE crisis. It was at that point that I learned about the cattle head deboning industry. I trust that hon. Members had a good breakfast before the debate.
I should say a few words about the trade so as to put the problem in context. Before March this year, cattle were killed in abattoirs and the bulk of the carcase was handled within the mainstream butchery trade. That business is vast: it is so large that it operates from enormous factories, its turnover is huge and its profit margin is correspondingly small in percentage terms. It will be important to bear that in mind when we consider the head meat boning industry later.
By contrast, the cattle head deboning business is tiny. It operates through about 12 firms, typically with 12 to 20 employees. It is a highly specialised part of the trade. It buys cow heads from abattoirs, takes them to purpose-built premises where the edible portions--mainly the cheek--are removed under strictly controlled conditions, and the remainder is dispatched for destruction, also under strictly controlled conditions.
Pinnacle Meats in Gosport is typical. It was set up by Graham Reed and John Gray in 1988, and established itself in the trade with four employees. United Kingdom and EC regulations became more stringent after 1988, and
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The company had to comply with the EC cutting plant licence for 1992, and the cattle head deboning regulations imposed by the Ministry of Agriculture, Fisheries and Food, which applied from August 1995. I am told that that is the only part of the meat distribution trade in which producers require a special licence.
The rules were strict. I visited Pinnacle Meats and I saw the way in which the rules were observed. The cattle heads were kept at regulated temperatures from the moment of slaughter to the moment of dispatch from the cattle head deboning plant. Temperatures and cleanliness were vetted at every stage by MAFF officials, who had right of entry at all times. The quality of the meat was vetted on arrival at the deboner's premises, and there were strict rules to ensure that the paths of the raw material and the product did not cross.
Record keeping was, by regulation, meticulous, and it had to be available to MAFF inspectors at all times. There were daily audits of stocks, with reconciliation of input and output. Maintaining those standards was expensive. At a cost of £300,000, Pinnacle installed epoxy resined floors, special wall cladding, metal detectors, code-printing weighing scales, vacuum-packed conveyor systems and a special scissor lift to enable the product to be loaded directly into a specially designed bay. The equipment was highly specialised, and referable only to the business of cattle head deboning. Those who have visited any such premises in any part of the country will know that there is no way of readily transferring equipment of that kind and using it to operate any other kind of business in the meat industry, or other industries. It is purpose designed.
As I have said, all that cost about £300,000. Most of the businesses involved were small family businesses. As hon. Members will know, it is normal for banks lending money to small family businesses not just to lend on the security of the company, but to require the security of the home of the proprietors. Pinnacle is typical of many small firms--the trade was chiefly concentrated among smaller firms--in that its proprietors borrowed against the security of their homes. They borrowed because they were told that they had to in order to comply with the regulations. In other words, the Government told them that they must spend the money to stay in business, and they had to take up the security of mortgages on their houses in order to do that.
In that way, Pinnacle and other companies built up a useful and profitable business. Pinnacle was deboning about 300,000 cow heads a year, providing a useful service to abattoirs and purchasers of the product and a profitable business for their employees. The process usually involved the removal of cheek meat, some of which was considered a delicacy. Pinnacle, for instance, exported 10 tonnes of cheek meat a month to France, where it is sold as a delicacy--joue de boeuf. Hon. Members who have had the opportunity to eat joue de boeuf in the Crillon may not know that it probably came from the industrial estate in Gosport. That was a matter of pride to my constituents--until 29 March 1996.
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Until that day, the business was providing joue de boeuf, meat spreads, sausages, hamburgers and other meat products throughout the United Kingdom and, indeed, Europe. Graham Reed and his partner had a sound, profitable business; they employed 25 people, who produced food in strictly controlled conditions. Then came the BSE scare, and the Government reacted by taking action against cattle. On 29 March 1996 they passed the Specified Bovine Material Order, which states that the whole of the heads of cattle that died in the United Kingdom, apart from the tongues, constitute specified bovine material that may not be sold for human or animal consumption. People who had profitable businesses on 28 March 1996 woke on 30 March to discover that those businesses had been destroyed. I reiterate that they had borrowed money that they now had no way of repaying, because they had no businesses.
Let me make two points about the Specified Bovine Material Order. First, there is nothing wrong with head meat. Foreign head meat is still being sold. It is head meat from cattle that die in the United Kingdom that cannot be sold for human or agricultural consumption; foreign head meat can be and is being sold in this country. We have become importers, rather than having a profitable export trade--Pinnacle had an export trade worth £15,000 a month to France alone. That is because the authorities in the United Kingdom are concerned only about the possibility that the method of slaughter used in UK abattoirs will lead to contamination of head meat. They are not bothered about head meat from other parts of the world. Head meat that is eaten now can come from anywhere other than Britain.
Secondly, no one has ever suggested that the UK cattle head deboners have any done anything wrong. They were controlled, and operated in a sterile environment; their businesses were well run and efficient. It is in no way their fault that they have been put out of business--for that is what has happened. The order of 29 March made the product illegal, and ended the trade.
Hon. Members may ask why the deboners do not go and do something else. The trade was highly specialised: it operated on specialised premises, and with specialised equipment. Pinnacle's blast freezer capacity was 30 tonnes a week, which is minuscule in comparison with that of larger meat producers. As I explained earlier, the larger producers operate with vast quantities, and because of that they work on tiny margins. It is impossible for a head deboner who, because of his specialised trade, was working on a margin of about 10 per cent. to compete with the mainstream meat business, which typically operates on margins of between 0.5 per cent. and 1 per cent.
Mr. Spencer Batiste (Elmet):
Can my hon. Friend confirm that the circumstances that he has described are the same in all similar bovine head deboning companies around the country, such as H. J. Wilson in my constituency? The point is that the owners of such concerns never had time to look for other business. They had all borrowed heavily to meet the requirements of the regulations, and on the day on which the order came into force they had no choice but to close their businesses. They did not have the option of looking elsewhere, because of the Government's determination to take action
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