Examination of Witnesses (Questions 660
- 667)
MONDAY 9 MARCH 1998
MR BARRY
MARTYN AND
MR TONY
COMBES
Mr Paterson
660. You have said you are prepared to co-operate
on future schemes with farmers. These will take time and money.
You expect the Government to put money in. Are you prepared to
put money in?
(Mr Martyn) I think that will take time—particularly
with beef—because it takes so long to produce the animals.
I was delighted that we were approached recently by a group of
farmers approaching us through an abattoir saying "We would
like to supply you with beef to meet your requirements".
That is excellent. This is farmers getting together, forming—I
do not like the word "club" but a club, if you like,
which is not retailer led. We have had bad feedback from farmers
about retailers' leading clubs, so we are delighted that we have
actually had farmers coming to us saying, "We want to get
together to supply you with what you want; tell us your quality,
the specifications of carcasses, etc". We have done that
and now they are saying, "We are going to aim to produce
this at a certain price". There is no mention of the markets.
That is taken totally out of the equation. A comment was made
very early this afternoon about the market setting very low prices
and I happen to agree with that; that is a danger. So we have
farmers coming to us, talking to us, saying "We want to produce
this very competitively; we will earn money out of it and this
is what we can do for you". We are actively pursuing that
now. That, in itself, will not take a lot of money to set up.
It will take time with beef to come up with the product.
661. It will take time because it takes eighteen
months to two years for the animal to come to the right age. Are
you prepared to help farmers bridge that gap so they then achieve
a quality level at which they can continue for the future on a
sound basis?
(Mr Martyn) The farmers we are talking
to obviously have product at the moment and it really is a question
of how they change their methods of farming to try to get more,
say, from the 40 per cent perhaps they are producing now that
meets the abattoir specification for us up to 80 per cent or whatever
because that will immediately increase their incomes. The farmers
we have spoken to are very focused on doing that. We are willing
to work with them in any way we can. I am not sure whether by
"help" you meant money or not.
662. We touched on Welsh Blacks earlier on today
but perhaps you could focus on a specific breed which bumps up
the proportion of carcasses to over 40 per cent. It is going to
take a few years to do that. Would you be prepared to put money
into that sort of stock and build it up?
(Mr Martyn) I think we have got an open
mind there. I would still see money in that sense perhaps coming
from banks rather than from ourselves. We are retailers; if we
have money to spare then we will open a new store, if we can,
somewhere and do what we know best in terms of getting a return
to our shareholders. Certainly these particular farmers we have
spoken to have said "If we can go and talk to the banks saying
that we have you behind us in this scheme, then we think we can
get money".
663. And you would be prepared to give a letter
of guarantee, say, that in two to three years' time you would
take the projects?
(Mr Martyn) Of course. We would need
to work out the details but, in principle, absolutely.
Ms Jackie Lawrence
664. You say in your evidence that in January
this year you had meetings with both the NFU and the FUW. Was
that the point at which you changed your sourcing policy to 100
per cent UK instead of 80 per cent UK and 20 per cent Irish? Also,
what else came out of that, if there were other specific things
at that meeting?
(Mr Martyn) We took the decision to change
our sourcing policy just ahead of that. With beef, obviously,
we have product being matured and in the pipeline so it was just
ahead of that and that was as a result of consumers coming in
and asking us about our policy and plenty of farmers coming in
and asking us about our policy.
665. What other constructive ideas came out
of those particular meetings?
(Mr Combes) From that meeting we advanced
the speed at which we were rolling out new labelling systems and
putting "Country of Origin" because we were planning
to do that at any rate in April but we advanced it to February
so we realised the urgency. Also what came out of that meeting
was—let me say it straight—there were farmers who
told us that they did not go into supermarkets because it was
not their job. We were able to point out through the meeting which
went out in the minutes (and I am very happy to let you have a
copy of those minutes; they are publicly available) and to say
to farmers, "Please, go into supermarkets so you can see
what it is the customers are buying so you can produce to the
standards which customers want". It is a two way process
and it is exactly the same as what happens when we meet with NFU
members at branch or county level when it gives them a chance
to come into our stores—not only to see behind the scenes
but to see the products that are being sold. A lot of them say
"Oh, we never go into supermarkets".
Mr Livsey
666. By common consent the livestock industry
in Wales is in its biggest crisis certainly that I can ever remember
and we will be extremely fortunate to have many producers left
in 12 months' time the way things are going. Lambs are selling
for £22/£18 in the market place—half the price
they should be and well below the cost of production. Part of
the reason for this is the strength of the pound. Are you at a
corporate level trying to lobby Government on their policy with
regard to the high pound policy they have got which seems to be
affecting production—whether or not it is in agriculture
it is shown at its worst there—and also the manufacturing
industry? Are you through the CBI, for example, doing anything
about that?
(Mr Combes) I think what we do very much
happens at face-to-face meetings. Yes, we are doing it corporately
through our trade associations but in addition to that it is what
happens when we meet ministers face-to-face. So the short answer
is yes, we are helping; we are putting the case so that farmers
do not feel the effects that they are feeling for ever and ever
and ever. But there is a limit to how much we can do as retailers.
667. So you are prepared to do that even though
there is an advantage in importing other products—meat products,
for example, at the present time?
(Mr Combes) It is exactly the same as
when, in March 1996, we said "We will carry on selling British
beef" even though it was quite clear that, in the short term,
it would have been to our advantage to stop selling it. We actually
took the long term view.
Chairman: I want to thank you for coming and
I want to thank you all, on behalf of the farmers, for the changes
in policy which seem to have taken place over the last few months.
I hope they continue because, as Mr Livsey said, there is a crisis—we
have established that much with our inquiry—and there will
be nowhere for you to source your meat in the future if things
develop in the wrong way even more. Thank you all; it has been
a very useful session.
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