Examination of Witnesses (Questions 640
- 659)
MONDAY 9 MARCH 1998
MR BARRY
MARTYN AND
MR TONY
COMBES
640. But if it had been UK, would it not have
been marked "Produced in the UK"?
(Mr Martyn) No. It would be now but it
would not have been then.
641. But the policy across the board has now
definitely changed, has it?
(Mr Martyn) It has. We are happy to label
anything if our consumers are telling us that is what they want
to see.
Mr Edwards
642. On that point, can you understand the frustration
when I and Mr Livsey attended a meeting of some 500 farmers in
Abergavenny recently where a farmer produced a pack of Safeway
meat which had "Heritage" on it? I now see what is in
your memorandum but can you understand the frustration of those
people who were really asking "Where in the world is Heritage"?
(Mr Martyn) Heritage is a brand. It is
trying to add value to what is a basic product and that is something
we should be trying to do, to add some brand value. Heritage is
about the quality of the product and the way it is produced. Heritage
is hip-suspended; it is a more lengthy and more costly process,
and that is us trying to add brand value to what is, typically,
a commodity market. I think that is something we should be examining.
643. So you are now saying that all that Heritage
beef is British beef and it is now so labelled?
(Mr Martyn) It always was British, as
it happens.
644. Can I take you on to issue of quality?
You refer in your memorandum to Safeway quality assurances schemes.
Do all retailers have different requirements in this respect and
would there be any scope for the major retailers getting together
to standardise the process?
(Mr Martyn) I cannot really quote for
the other retailers. Our scheme goes from farm through to when
it is received into Safeway as a retail pack. What we have done
very deliberately is made sure that the farm part of the scheme
is in line with the national schemes so that we are not imposing
different standards on farmers from the national schemes of farm
assurance that he may sign up to. I think that is important.
Mr Thomas
645. Could you assist us with the issue of quality
with regard to Welsh beef? We have heard evidence that the extent
to which Welsh beef meets the requirements of supermarkets displays
some variation. A figure of 40 per cent has been mentioned—in
other words, only 40 per cent of animals come within the criteria
laid down by certain supermarkets as to what they want in terms
of promotion. What do you have to say about that?
(Mr Martyn) I would not perceive Welsh
product to be any different in quality from elsewhere. We are
talking about a carcass specification to go into an abattoir and
my view would be, yes, it probably is about 40 per cent. I do
not perceive any special quality issues with Welsh beef product,
nor do I perceive that it is doing more to conform to those specifications.
646. Would you say the same about lamb?
(Mr Martyn) I would. Exactly the same,
yes.
Mr Livsey
647. You appear to be taking sites in livestock
markets and putting Safeway stores up there. Certainly in my constituency
there is a very controversial scheme to do that. I know in Mr
Wyn Jones' constituency, Llangefni market has gone that way. Are
you going to be able to guarantee us that locally produced produce
that went through those markets is actually going to be sold on
the shelves of the Safeway supermarkets that look as though they
are taking over from the livestock market?
(Mr Martyn) We are at your disadvantage.
I do not know which market you are referring to.
648. At Brecon market, just north of here, there
is quite a controversial plan—and at Llangefni on the isle
of Anglesey—for Safeway to build actually on the livestock
market sites.
(Mr Martyn) That is news to me so I am
not quite sure how you would like me to comment on that.
649. I am just saying they are prime sites and
one would like to be reassured that local produce and local meat
would feature on the shelves.
(Mr Martyn) I would assume that somebody
put them up for sale and that we bid for them in competition with
our competitors and did not just go in and put a market out of
business. Is that a reasonable assumption?
Chairman
650. That is a rhetorical question. I think
the idea is that he is asking for a commitment. Mr Livsey is making
the point that livestock markets are closing: will you still be
able to be providing British beef through the stores?
(Mr Martyn) All our lamb will be Welsh
lamb in any stores that open there. We will open those stores
with a butchery counter; they will have Welsh beef and Welsh lamb
on the butchery counter.
(Mr Combes) Can I reassure Mr Livsey
that, if a Welsh store does not want to stock, say, New Zealand
lamb, it does not stock it because we give our customers what
they want. A third of our Welsh stores do not stock New Zealand
lamb because no customer wants to buy them. If no customer in
Wales ever bought New Zealand lamb we would not sell it in Wales.
It is as simple as that.
Mr Livsey
651. That is interesting. You mentioned you
sold 40 per cent New Zealand lamb. Presumably that is mainly in
the months of January, February and possibly into this month.
Is that a high percentage of your total sales at that time?
(Mr Martyn) I think it is representing
about 40 per cent. That is off the top of my head.
652. That is very useful. You mentioned there
may be a market for home produced frozen lamb, which is of particular
interest. How could this idea be taken forward?
(Mr Combes) One of the easiest ways is
for farmers to get together in a co-operative and come to us and
say "How can we work on such a plan, please help us",
because we do have a history (as other major multiples do) of
helping small suppliers. One of our trading policies is to buy
British wherever our standards can be met and we then go on to
say that, where our standards cannot be met, it is obviously in
our interests to help small producers and small suppliers. We
have a distribution network through regional distribution centres
which enables small suppliers to deliver to one depot and we then
back-haul to other depots so there are great possibilities. In
the same way, however, as the New Zealand frozen lamb market has
grown over the years, because the right product is in the right
place at the right time for the right price, if there is an opportunity
to Welsh farmers to get together they must come and talk to us.
We put that invitation out on 5th January.
653. So would you think that is a good idea
and you are encouraging Welsh farmers to form co-operatives to
market their produce through your stores?
(Mr Combes) I do not know if you remember,
Mr Livsey, but the former Chairman of Safeway said that to you
in the Agriculture Select Committee in 1992.
654. I was not a member of the Agriculture Committee
in 1992. I am afraid I left it in 1986.
(Mr Combes) Sorry, it was earlier than
that—1986 I think, and that is what was said. Mr Martyn
can give an example of where we do meet with farmers and they
do come up with the right idea.
Mr Edwards
655. Have you got any priorities for Government
policy or for European Union policy which you think could help
the Welsh livestock industry at the moment?
(Mr Martyn) I think that is a very tricky
question. It has not helped me having a couple of hours to think
about it. I think in the long term clearly our farmers need to
be basing their business without any subsidies in a free market
with all things being equal. If I was in Government—and
I am speaking personally not for Safeway—I would be considering
some sort of short term action.
656. Could you expand on that?
(Mr Martyn) I think people are in danger
of going out of business. I do not know how you would frame that
but we need something to stop people going out of business in
the short term. Clearly in the long term, when the export ban
is lifted (which is clearly very important on beef), we need to
all be playing on a level playing field and any subsidies should
disappear. I would consider some sort of short term aid; I do
not know how you would do that, and that is a personal view.
657. On the issue of the beef export ban, do
you envisage it being lifted in the foreseeable future?
(Mr Martyn) You are asking a lot of political
questions.
658. They are not trying to be political questions.
I am trying to respect your expertise in this area.
(Mr Martyn) My personal view is that
certain European Community states will fight very hard to stop
that being lifted as long as possible.
(Mr Combes) I think there must be a Government
priority to get the export ban lifted because that, along with
the high exchange rate, is the main problem facing farmers. If
they were able to export and if the high price of the pound was
to come down so they could export financially, that could be part
of the solution. Certainly we are supporting Governments in saying
that that export ban must be lifted as quickly as possible—hence
the ban on beef-on-the-bone. If we want to convince Europe that
we are taking all the necessary steps then, clearly, our Government
had to ban beef-on-the-bone.
Chairman: I think we are all in agreement there.
Mr Jones
659. Can I put it to you that you did invite
the question from Mr Edwards because it is actually in your evidence.
You say in your evidence that what is needed is for the Government
to provide additional short term help. Would you indicate what
kind of help? There are two ways, it seems to me, that that could
be achieved—and this would be in addition to what the Government
has already announced. Presumably your evidence was given before
the latest indication of help because we have heard evidence from
your competitors (and presumably you subscribe to this view) that
one of the reasons for the fall in returns to producers is the
add-on cost which the industry has received as a result of meat
hygiene charges and the reduction in the subsidy for the rendering
industry and so on. Now you can either ask it to pump more money
into the industry through additional subsidy or you can reduce
some of the on-costs. Which one would you prefer?
(Mr Martyn) In the short term I would
reduce the on-costs.
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