Select Committee on Welsh Affairs Minutes of Evidence


Examination of Witnesses (Questions 920 - 939)

TUESDAY 21 APRIL 1998

MR MIKE GRIMWOOD and MR VINCE CRAIG

Mr Paterson

  920. That is a huge gap. Has there always been this gap on price or is this partly due to the pound?

  (Mr Craig) The pound helps the situation but, as Mike has said, the products that we are manufacturing predominantly in Wrexham have been at a very fixed price for some considerable time. It has also to be said that the selling price of these products has been at a very consistent situation and the bulk of the products have not risen in retail price in our manufacturing sector out of Wrexham in the last three to four years. We have to maintain our profitability by working harder, basically.

  921. What would your advice be to UK farmers to get a greater share of your sort of market?

  (Mr Craig) The first important thing is to decide whether they want to get involved in our market place. I thought it was very interesting, in the previous presentation, when they described how little meat they have available for manufacturing purposes, and they are a very big player in the fresh meat market. If we thought about the percentage—about nine per cent, I think you quoted—that would be at 95 per cent BL. I would be surprised. It would be a very small tonnage. We require in the two Wrexham plants approximately 1,300 tons per year. The first decision that the UK manufacturer has to make is can he supply us with those sorts of quantities. Can he supply it frozen because again, as a previous speaker has said, our manufacturing method requires it to be frozen. Can he guarantee the quality? Can he guarantee the microbiological standards? Can he guarantee the chemical standard? Can he guarantee the traceability? At that point, we will certainly be very interested to speak to him.

Chairman

  922. Mr Craig, you intimated that the own label retailer dictated practically everything to do with the sourcing and quality of the ingredients, including meat, but then you just implied that virtually all of it was imported because it was frozen and consistent.

  (Mr Craig) I said that the meat that was used at Wrexham was predominantly ITQ frozen and that information is included in all our retail specifications.

  (Mr Grimwood) The imported beef is meat to be used for mincing purposes. Where we are purchasing diced beef, for which we go through a somewhat different process, then at a UK source we purchase a fitness for purpose requirement.

  923. If a major retailer was to tell you they wanted all their beef sourced from the UK, could you deal with that?

  (Mr Grimwood) We would have to turn ourselves inside out to try and do it.

  (Mr Craig) The simple answer is that if they asked us to do that and we felt we could get a source of meat of the right quality and that any price differentials that were involved they were prepared to pay for, then of course we would be interested. It is our role in life to manufacture to our customers' and our consumers' requirements. That is how we survive.

  924. We had evidence from the major retailers who implied that they really had no control over the source in manufactured meals. That does not seem to be the case.

  (Mr Grimwood) I think the comments earlier on we would have supported loudly from the back.

  925. That alone today has been very interesting because it is the opposite of what we have apparently been told. We may have been asking the wrong questions, but we appear to have been told something different. It also means that, as you have just confirmed, if they were to say to you that they wanted all their meat sources in their own label, ready meal products, you would have to do it because they dictate.

  (Mr Grimwood) There would be a degree of reinvestment for us so it is a very complex situation but, at the end of it, we serve our customers.

Mr Livsey

  926. When you do buy UK meat, where do you buy it from?

  (Mr Grimwood) If it is of any help, I can give you a list of names of people who supply me. The companies would include ABP in Shrewsbury. They also have a supplying plant in Ellesmere Port; Anglo Dutch Meat, who have plants in Gillingham and Hereford; Buchan Meats in Turiff; Midland Meat Packers; Yorkshire Premier, a company called Matthews and a company called Chittys.

  (Mr Craig) May I add one other one, which may be of interest to the Committee. Not in Mike's division but in our meat and delicatessen division we have recently launched a very successful range of what is called "meat plus", i.e. adding value to meat, and there are a number of lamb products in that product and we are buying that lamb exclusively from a company called Cig Mon. It is a very interesting process, and it leads on almost from the question you asked earlier on. When we actually started to work with this company they found it quite difficult to get to our specification standards, particularly in the areas of trimming and fat content, but in working with them we have found that very useful and we also intend to discuss with them taking further beef products for the same range now that they are attuned to our requirements.

  927. To carry on from there, what do you use the UK meat that you do purchase for? I think you have partly answered the question already but can you confirm it?

  (Mr Craig) We use it in that range of products. We also use it quite a lot in products, for example, that have a very high level of processing. One of our subsidiary companies is involved in pate«s and pastes, that type of product, where the product is very destructured during the cooking process, and we find the meat perfectly acceptable and it is a product that allows more variability. The specification allows a greater level of flexibility because of the nature of the products.

  928. Do you buy any UK frozen meat at all?

  (Mr Craig) Yes. For that purpose that meat is generally frozen for the paste and pate« manufacture.

  (Mr Grimwood) And the diced meat that we purchase for ready meals is also processed.

  929. May I ask where you are buying the frozen meat from?

  (Mr Grimwood) It is ease and simplicity of supply generally. I am sure that the chaps in the meat companies would agree—

  930. Sorry, I said "where" rather than "why"?

  (Mr Grimwood) Sorry. The list of suppliers that I mentioned, a number of those will supply frozen and that would be our normal source.

  931. But presumably some of it comes from the Buchan Meat Company, for example, in Scotland?

  (Mr Grimwood) I would have to check as to whether they supply frozen.

  932. I would suspect so.

  (Mr Grimwood) But for most of them we would be a secondary supplier and they would want to stock enough beef for somebody like Buchan to deliver whole trailer-loads of product to us to keep it economical.

Ms Lawrence

  933. I think you have partly answered the question and it may be that you would agree with the people who gave the first evidence from the British Meat Manufacturers' Association, but can you explain why you predominantly use frozen meat? Is it for technical or commercial reasons?

  (Mr Craig) Basically, where we use frozen meats within Mike's division the equipment is made for breaking the meats, so that is a key requirement, but I would not under-estimate and would not under-state the advantages of having a constant supply, that you have back-up stocks. The other thing I would really like to highlight is the advantage we have in terms of being able to sample the products of the meat for microbiological safety factors, for ensuring that it is what it says it is, and also for its chemical test before we bring it into the plant, particularly for chilled foods. We do not want to find out we have a problem three days after the product has been manufactured because it had not passed the microbiological test. So it is very advantageous for us from a safety point of view.

  (Mr Grimwood) If I could again perhaps add to the answer, in terms of the sort of product that we buy we are a secondary customer, a secondary supply point, for meat processors who are really killing cattle to make retail packs of meat. It is very important to us that we have product available when we want it, not as and when retail customers want our product available to sell. The ability to have stocks of product as and when we need it is absolutely critical to our process.

  934. When we were talking to the supermarket people, they did say that one of the reasons their costs were high was because there was basically no market for the forequarter meat; they really wanted just the hindquarter meat, that there was no market for the forequarter meat. I can understand in terms of what you are saying that there are limits in terms of fresh meat for use in the manufacturing sector, but if there were more provision for freezing that, would that partly solve that problem? Would that meat then be suitable for your processes?

  (Mr Craig) I think it would solve the problem as long as you had the quality at the same time.

  (Mr Grimwood) As long as we had cattle grown by farmers to meet the sort of specification that we need, and similarly again, to repeat things that have already been said, we had members of the local Welsh farmers sitting in one of our meeting rooms talking about how we buy meat and the reasons for it, and the general consensus was that they would not grow meat to the standards that we require for our process.

  935. How does that vary from the retailers who demand, they say, the highest quality, the hindquarter, in terms of what is being produced for them?

  (Mr Grimwood) We require very high lean levels for our process and I think if you sat a number of people down they would explain that some 95 VL visual lean is a very high spec. for forequarter beef and is not easy to come by. We require that for our process. The retailers will not really be interested in the visual lean of forequarter; they prefer the hindquarter meat. The cattle will be grown to that and our product will be a by-product from it.

Mr Thomas

  936. May I come back on this and explore that a little bit further. You said that you sat down with Welsh farmers and you said that they would not be able to supply forequarters in conformity with your specification. Is it really "would not" or is it "could not"?

  (Mr Grimwood) It is a good question. I guess I would have to refer you to the farmers. I repeat what they said to me rather than being somebody who knows how to grow cattle.

  937. I am not a farmer, but is there an element that they would not be able to produce the sort of traditional Welsh lamb, the best cuts of Welsh lamb, and from the same animal produce forequarters meeting this extraordinarily high specification that you have?

  (Mr Craig) Perhaps I need to clarify something. We are primarily here talking in terms of beef because our quantities of lamb are minuscule.

  938. I am sorry, I should have said beef. Is there a conflict there between getting a reasonably popular type of best cut from one animal and having to conform with your specification or can you just not do that off the same animal? Is there something in that?

  (Mr Craig) May I be totally frank and say I do not know.

  (Mr Grimwood) I can tell you that we struggle to gain supplies and we ask people for it and we consistently struggle for it. In what was a far more casual conversation than this, we had a view expressed by a few chaps who farm in North Wales.

  939. Who said they would not or they could not?

  (Mr Grimwood) Who said they would not but it could be they could not. I do not know.


 
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