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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