Examination of Witnesses (Questions 580
- 602)
MONDAY 9 MARCH 1998
MR STEVE
MURRELLS and MR
DAVID SAWDAY
580. But you have not got enough evidence yet?
(Mr Murrells) Not at this moment, yet.
Ms Jackie Lawrence
581. I was wondering if you operate the same
policy across the UK. There is a feeling amongst farmers in Wales
certainly that, where there has been a high profile, you might
be labelling your meat appropriately whereas through the rest
of the UK that marketing policy is not necessarily the same. Is
it the same or is it just localised?
(Mr Murrells) It is localised. I think
it is something we need to look at which has obviously come out
of this morning's proceedings. It is that balance between this
Committee wanting to drive Welsh produce and similar committees
in Scotland or Ireland wanting to drive their own products as
well and it comes back to this balance that we have to strike.
582. So you are going to look at potentially
having standardised labelling?
(Mr Murrells) I would be happy to look
at research asking customers whether or not there was value in
us stocking Welsh beef in our UK stores.
Mr Livsey
583. Just one short question on labelling: do
you actually state whether the product originates and has been
produced in a part of the UK, or do you say it has been packed
there?
(Mr Murrells) No. When we state "Country
of Origin", that is reflective of where the animal was born
and killed. The new beef labelling regulations which will come
into force, I suggest, in the next two to three months will actually
force other people to put clearly the country of origin on where
the animal has been grazing for 90 days.
584. Do I take it from what you have just said
that you do not actually sell any meat products that just say
they are packed in Britain?
(Mr Murrells) Within fresh meat, it is
"Fresh British beef", "Fresh Irish beef",
"Fresh Scottish beef", "Fresh Welsh beef".
We do not say "packed".
585. But you will presumably have manufactured
meats on which you say "packed".
(Mr Murrells) Yes, and I mentioned earlier
on that we need to go that much further. We have a whole raft
of businesses now who will try and pull that in and get synergy.
Mr Paterson
586. You have given a figure of 97 per cent
of your meat coming from the UK. Of the 3 per cent that is imported,
is the proportion of forequarter meat and hindquarter meat the
same?
(Mr Murrells) I would suggest not, bearing
in mind we brought in hindquarter meat purely for the Christmas
period. There seems to be more confidence in hindquarter meat
than forequarter meat, which Sainsbury's alluded to earlier on.
We have to try and work hard to regain the confidence. The meat
and livestock labelling that goes on mince has gone a long way
to help but there is still an acceptance that more expensive hindquarter
cuts are what people are actually after. It is interesting that
when you have a beef scare—prostate cancer before Christmas,
bone in beef—it is always the forequarter area that drops
away to begin with, which is about customer confidence.
587. And would the forequarter meat, say from
Ireland, be cheaper because they have access to export markets
and our producers do not for the hindquarter meat?
(Mr Murrells) The issue of forequarter
meat from Ireland—which is, I suspect, with regard to Holyhead—is
an unfortunate one. If any one of those other vehicles had been
stopped they would have found the same product going into the
majority of other retailers in this country. The supplier that
served us served us for ten years—a decade. They served
us before BSE, during BSE and after it. They operate to the same
standards and they have done a very good job and I think it would
be wrong for us to walk away from people like that who serve Tesco
loyally and very well.
588. Yes, but you have to recognise there is
real concern—if not outright anger in Wales—that there
are imports coming in from Ireland when prices have collapsed
here.
(Mr Murrells) I accept that and it is
a question now of this unique situation in beef now where imports
are an issue whereas they have not been in previous years, where
we have been able to export ourselves. We have a responsibility
to operate a level playing field and the visit to Ireland proved
the case.
589. I put it to you as Britain's biggest butcher
you have a real responsibility here and, if that extra 3 per cent
could come here, it would make a big difference. What are the
advantages in Ireland, apart from price?
(Mr Murrells) The advantage in taking
product from Ireland is that they are an export driven business
who actually are so focused on export that they will change to
what customer needs are. So that would be one of the advantages
that I would see in trading with Ireland. They are focused; they
change very quickly to what we need as their customer.
590. They also do not have their hands tied
behind their backs with the export ban and all the other costs
imposed over the past year.
(Mr Murrells) I accept that. Unfortunately
those are Government and European regulations but, if you were
to speak to the Irish Government or Irish farmers, their income
is falling at such a rapid rate—in fact, very much in line
with the income over here.
591. Do you spend the same amount of money promoting
Irish meat as you do British meat?
(Mr Murrells) In the UK?
592. Yes.
(Mr Murrells) No, not at all. Where we
can, we source domestically. Where we have to go outside domestic
sourcing we will do so, but we promote British meat extremely
hard in this country.
593. And as a percentage of the finished price
of a piece of meat, what do you spend on promotion?
(Mr Murrells) I would not have those
figures with me today.
594. Could you let us have them?
(Mr Murrells) I would not see a problem
in letting you have those figures.
Mr Edwards
595. Could you tell us what would be your priorities
for Government policy now?
(Mr Murrells) I think it is dangerous
for a retailer to suggest priorities to Governments. We are there
obviously to put in place legal positions by the Government. Beef-on-the-bone
is a good example. I think we all recognise that there are some
extraordinary pressures on agriculture in this country and that
the Government are making a number of moves to help the situation.
Beyond that, I do not think it is relevant for a retailer to suggest
what the Government should do.
596. You are experts in this field. We want
to help the industry. We will be making recommendations to Government
and would value your contribution to that.
(Mr Sawday) I guess we are experts in
trying to understand what customers want—so thank you for
that—and we have been working hard over the last couple
of years to try and understand what that is. A lot of what we
have talked about this morning is the fruit of that understanding—of
trying to have traceable systems, producer clubs, guarantees and
those sorts of things at the farmer end and, at the other end,
trying to deliver the meat in the pack that the modern customer
wants. We have to appreciate that meat now stands alongside a
whole variety of other products in competition with it for that
pound of a consumer's purse. So, if we are experts, it is in trying
to understand how we place meat (which is an historic food) in
competition with all those other things like pasta and noodles
and things which people will spend their money on if they do not
buy beef.
Mr Livsey
597. Could you just tell us whether there has
been any increase over the last twelve months in meat coming in
from Northern Ireland?
(Mr Murrells) One of our key suppliers
is a Northern Irish supplier. They operate out of two sites; their
business is growing with us as a reflection of their performance
and as a reflection of our rationalisation of a supply base. So
yes, I would suggest that there is more meat coming out of Northern
Ireland. At the same time there is more meat coming out of our
UK suppliers purely due to the fact that we have restricted the
supplier base.
598. I would be grateful if we could get hold
of a figure for the increase in supplies from Northern Ireland
in the last twelve months.
(Mr Murrells) Yes.
Mr Edwards
599. You say it is coming out of Northern Ireland.
Is it born and reared in Northern Ireland?
(Mr Murrells) For our Northern Irish
stores, and also for our UK stores, we would be taking Northern
Ireland killed and reared stock that is served by Northern Irish
stores and also served by UK stores.
Mr Caton
600. Earlier you heard Sainsbury's representatives
broadly agree with what some other retailers have told us—that
less than 40 per cent of beef produced in Wales meets their quality
specification. Is that your experience also and what can be done
about it?
(Mr Murrells) It is accepted that, if
you look at stock going to the market place, the figures are low.
The clubs give us the ability to register direct back to the farmer
where they actually are in terms of meeting our specification.
That direct feedback allows that rate to grow and grow and grow.
I do not believe there is a fundamental problem in Welsh production
to produce what we want. If that were the case, we would not be
investing at the rate we are.
601. That is interesting. You say producer clubs
are a way, where you see a quality problem, of addressing it?
(Mr Murrells) It is a way for us to give
direct feedback. As part of the database we are putting together,
the farms are visited four times a year where they are given feedback
on how they are performing. Those farmers certainly in our new
site at Merthyr Tydfil will be able to come and view their stock
going through the chain so there is improved communication with
themselves and the supplier. So as long as we work together and
give each other the right feedback (and I do get feedback from
farmers) then I am sure things will be progressively good for
all.
602. Do you perceive any problems with the quality
of lamb produced in Wales?
(Mr Murrells) Not at all. We take 12,000
lamb a week. We launch the Cig Mon producer lamb club in the next
couple of weeks and that is a direct support for Welsh lamb production.
(Mr Sawday) There is an issue with lamb
built on a point that Mr Livsey made earlier on which is that
we are seeing a differentiation in the market at this time of
year between the requirement for young and slightly older lamb.
What the British market at this time of year is delivering is
lamb basically between ten and eleven months old, born in April
last year. We are picking up this demand for a younger product
and it is that which we talked about earlier when we mentioned
the quality that New Zealand delivers. So it could be that early
lambing could be one thing to look at.
(Mr Murrells) That is right. The problem
you have got is that a lot of our lamb producers in Wales come
from the upland areas which is where it is very difficult to extend
the season. We are working hard, through different breeds, to
lamb earlier. Then, however, you have the double edged sword of
welfare in terms of bringing lambing on artificially and we have
to make a balance between welfare considerations and producing
young lamb in certain areas.
Chairman: Thank you very much. We have given
you quite a lot of extra work in terms of supplying the Committee
with help in our deliberations and perhaps we could also ask you
to produce your wonderful graphs for lamb as well. Thank you.
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