Memorandum from the British Meat Manufacturers'
Association
INTRODUCTION
The British Meat Manufacturers' Association
is the major representative trade association for manufacturers
of meat products and meat preparations within the United Kingdom.
There are about 70 companies in full membership. Their declared
turnover for membership purposes (this will include only processing
turnover at factory prices and will not include allied operations
such as the sale of fresh meat) is in the region of £1.5
billion. About 20,000 employees are declared for subscription
purposes as working in the manufacturing meat product and meat
preparations area.
The profiles of BMMA member companies are very
varied but basically they can be subdivided into those producing
chilled products without further means of preservation, frozen
products, cured products and canned products. The main raw materials
used are pork and beef, some specialising in the use of one of
these raw materials and others having both. Chicken and, particularly
since March 1996, lamb are also widely used.
1996 MEAT USAGE BY THE MANUFACTURING SECTOR
|
| Quantity used inmanufacturing '000 tonnes
| % of overallconsumption |
|
| Pigmeat | 1,035 | 74%
|
| Beef | 251 | 31%
|
| Poultry | 361 | 22%
|
| Lamb and Mutton | 87 | 24%
|
|
NB: Beef usage fell 25 per cent in 1996 owing to the
BSE crisis but was compensated by higher consumption of other
meats.
GENERAL SUMMARY
1. The meat most used by BMMA members is pigmeat and
this is largely but not exclusively sourced from the UK herd.
In 1982 BMMA instigated the Charter Quality British Bacon scheme
in order to provide a consistent standard of manufacturing excellence
for curer Members and to promote sales of British bacon. This
scheme has been complemented by the Charter Quality British Ham
scheme. In order to qualify for the Charter mark, manufacturers
must use British pigmeat.
2. The market for meat products was severely disrupted
in 1996 by the BSE crisis. Sales of processed beef products slumped
and manufacturers sought to reformulate products rapidly often
switching to alternative meats, particularly poultry. Market demand
has been variable over the past two years although it seems now
to be stabilising. During this period manufacturers have had to
adapt specifications and product ranges in line with their customers'
requirements. British meat, principally beef and lamb, have at
times been viewed as carrying commercial risks or disadvantages
because of uncertainties and constraints linked with BSE and some
manufacturers preferred or were obliged to source outside the
UK. As the BSE epidemic declines and consumer confidence returns,
there is now a return to British meat.
3. Meat manufacturers source raw materials according
to a product specification which in broad terms determines the
quality of meat used (eg visual lean, suitability for processing)
and price. Manufacturers seek meat which is consistent in quality,
supplied in appropriate form (eg frozen; deboned, cut and trimmed
to specification), from a reliable and traceable source and available
at a competitive price. In some instances, customers stipulate
the supplier or origin of the meat.
BEEF
4. Prior to March 1996 BMMA members declared a beef product
annual tonnage of 166,422 and a turnover of £405,026 million.
In the aftermath of the crisis, the market in beef products dropped
dramatically and sales levels in April 1996 as a proportion of
pre-BSE sales were on average: burgers 31\6 per cent; sausages
56\3 per cent; pies 61\3 per cent; ready meals 37\6 per cent.
Overall sales of processed products containing beef have returned
to about 80 per cent of pre-March 1996 levels but consumption
of burgers and pies remains depressed.
5. Sourcing of beef has been affected by the BSE crisis
in the following ways:
(a) The slump in consumer confidence meant that it was
considered expedient to use non-UK beef until the market re-stabilised.
(b) The ban on the sale of over-thirty month (OTM) beef
cut off an important source of supply to the manufacturing sector.
Beef of this age is more suitable for manufacturing than younger
beef and, following the OTM ban, it was only available from third
countries granted a dispensation.
(c) Although many BMMA members were forced to pull out
of exporting, a small number worked to keep their export business
using imported beef. The veterinary controls required meant that
it was considerably more expensive to use both domestic and imported
beef in the same plant and many manufacturers decided to use imported
beef for all production.
However, the EU Council of Ministers has recently
agreed to tighten controls even further and UK manufacturers will
no longer be able to afford to export profitably. It is likely
that many will abandon exporting or, if they are able, relocate
export production abroad. This is a severe blow to businesses
and to UK export markets for beef products which, once lost, could
be very hard to regain. The authorities are proposing that this
strengthened control system should eventually apply to the UK's
date-based export scheme: BMMA can only warn against the excessive
bureaucracy and costs involved.
(d) Manufacturers would like to take advantage of beef
from intervention stocks but are restricted by the inadequate
level of traceability and the ad hoc introduction of new rules
(such as the ban on bone-in beef) which make stocks unusable.
LAMB
6. Immediately following the BSE-crisis, there was an
increase in the use of lamb and mutton in processed products to
compensate for the slump in demand for beef, but this has decreased
as beef consumption has risen again.
7. For reasons of price, quality and availability, meat
manufacturers largely source lamb and mutton from Australia and
New Zealand. The deboned, frozen form in which it is supplied,
together with its consistent conformity to visual lean specifications,
traceability and competitive price, make it highly suitable for
processing.
8. Importantly, Australia and New Zealand also enjoy
TSE-free status which provides some security against stock losses
at a time when British beef and sheepmeat are still subject to
close scrutiny by SEAC. For example, the UK requirement to remove
the spinal cord of sheep over 12 months and the European Commission's
attempt to classify ovine vertebral column as an SRM all affect
confidence in British meat and processing costs.
OTHER FACTORS
9. A further cost factor which has yet to be recognised
by Government is the cost of rendering of animal
waste from abattoirs and cutting and manufacturing plants which
will have to be absorbed by the industry. This affects all three
species and removal of the rendering subsidy is estimated to raise
by-product collection charges to £150-200 per tonne. This
contrasts with the pre-BSE situation where processors were paid
by renderers for waste in the region of £35-50 per tonne.
10. The ban on the feeding of mammalian meat and bone-meal
to all farm animals in the UK has also placed pig producers at
a cost disadvantage versus competitors on the continent where
pigs may be fed MBM.
11. The cost of Meat Hygiene Service inspection
arising from the BSE crisis and the extension of SRM rules to
sheep are a further burden on the industry. Inspection charges
are also due to rise as a result of a change in the calculation
basis and the decision to increase veterinary supervision in cutting
plants.
12. The meat manufacturing sector can be seriously affected
by the precipitate way in which BSE rules are introduced. The
UK decision to ban the sale of bone-in beef is one example
of legislation which came into force before the industry had a
chance to see the legal text. The extension of SRM rules also
caused disruption and uncertainty with HMG only able to provide
partial details in advance of implementation. In other words,
industry has to comply with laws which it might have had no time
to examine in advance despite their impact on what can be legally
produced and marketed.
16 April 1998
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