Examination of Witnesses (Questions 100-113)
MR KEVIN
HAWKINS AND
MR ALAN
BLACKLEDGE-SMITH
10 JUNE 2003
Q100 Chairman: The parent EFRA Committee
is in fact going to visit Brazil very shortly and we will be looking
at a producer but whether it is a Safeway producer or not I am
not sure. One final point and that is on the use of antibiotics.
If there were no antibiotics used or if they were not used on
the scale that they are, is it not the case that because of the
dusty, hot, stressful and overcrowded conditions in which chickens
are produced, disease would be rife and the whole industry would
collapse in on itself? Are you not asking us or are you not being
disingenuous when you say that the use of antibiotics as a growth
promoter is not something which is sought but, if it is a by-product—and
I read this into your comment—as a sort of prophylactic
use of antibiotics, so be it, and can you not therefore describe
what is the main objection of growth promotion as being, "Well,
it is only a prophylactic use to prevent or contain disease"?
Is that not what is happening?
Mr Blackledge-Smith: I think that
the industry is well aware of the changes taking place in antibiotic
usage and they have diminished over a period of time and history
shows us that other countries that have done the same have seen
the increase in the use of therapeutic drugs to catch up with
various problems. It would be very easy to say, "Let's not
do that, let's stick with the antibiotic growth promoters."
However, I think there are ways and means and in fact we know
that there are ways and means of actually improving or changing
the way in which animals are fed or housed which will balance
up the effect of both of those and we believe that that is the
route that should be taken as opposed to just going back to what
was before.
Chairman: We will develop this area of
animal welfare standards.
Q101 Mr Wiggin: I just wanted to
pick up on one thing you were saying earlier about standards and
that your supermarket has just one standard and, if food comes
up to that standard, that is acceptable. If you envisage two identical
poultry farms, one here and one in a country where wages are lower,
you would presumably not really mind buying your chicken from
there.
Mr Blackledge-Smith: Providing
the standards were the same.
Q102 Mr Wiggin: So, the suggestions
that we have had from the CIWF would simply put UK production
out of the loop because it would not be competitive, not for animal-welfare
standards but simply because it would be cheaper to produce abroad
because of simply human-welfare standards such as the minimum
wage.
Mr Blackledge-Smith: I think there
are various other factors which come in to play in where we source
our product from. I think that there is a wish by the British
consumer to have British products and I think that probably 95%
of our chicken is British—I am talking Safeway and not for
the British Retail Consortium—and also there is another
part that comes into play—and this would apply across any
of the species—that, when you are promoting a product or
have a particular ingredient for a product and you are looking
for that one particular ingredient as opposed to buying a whole
chicken, some of these other countries, as well as Britain, have
been very productive in producing products exactly for our market.
Q103 Mr Wiggin: How do you ensure
that all poultry products come from poultry that were free to
express normal behaviour, which is the `five freedoms', and how
do you audit premium level welfare standards?
Mr Blackledge-Smith: It does not
matter whether it is a premium level, mid-range or an economy
level, all the standards we apply would be exactly the same. Typically,
as with any other retailer, we would probably get the odd complaint
about a product, for whatever reason it might be, and sometimes,
depending upon the nature of it, we will then instigate a full
audit trail of those products or product.
Chairman: I am very sorry to interrupt
you but we are going to suspend the sitting for 15 minutes to
allow for a division in the house.
The Committee suspended from 3.55 pm to
4.09 pm for a division in the House
Chairman: Thank you for your patience.
We will press on into the area of pricing and marketing. It is
not a direct parallel but one of the astonishing things that we
hear on the EFRA Committee and as MPs is the tiny proportion,
for instance, of the delivered doorstep milk price actually gets
to the milk producer and there is a similar phenomenon at work
in terms of eggs and chickens.
Q104 Mr Mitchell: Let us begin with
the poultry argument. It seems to me that the main argument against
caged birds, both broilers and eggs, is that it is cruel to keep
chickens in cages: they do not have much room, they grow deformed
and their legs break. Does the consumer really care about the
cruelty involved and the products the consumer is buying? It is
never a consideration with me but I do not buy all that much.
I even hate to think where eggs come from. I just wonder how preoccupied
the consumer is with cruelty.
Mr Hawkins: I think that is a
good question and I think the short answer is that probably most
consumers most of the time are not concerned. If you targeted
someone going into or coming out of the supermarket and said,
"Are you concerned about the conditions under which chickens
are reared?" and you reeled off a whole list of welfare issues
with deaths, broken legs and whatever, they would say, "Yes,
I am concerned; I do not care much for that." Actually, does
it affect their buying behaviour at the point of purchase? Does
it make them say," I am not going to buy chicken this week
in protest against these awful conditions. I am going to buy pork,
I am going vegetarian" or whatever? The short answer is that,
except for a small minority of people who are committed morally
to animal-welfare standards and do let it influence their behaviour,
the vast majority do not. In our evidence, we quote some IGD research
which I think illustrates that, that people do have concerns about
certain production issues in the supply chain, particularly factory
hygiene, but that actually, when it comes to the point of buying
something, the impact is very limited.
Q105 Mr Mitchell: That is what I
thought. So, they are prepared to pay more for, say, organic or
a safe method of production but not necessarily a premium on eliminating
cruelty?
Mr Hawkins: Bringing organic in
introduces a bit of a complication because the growth in the organic
market, not just for chicken but for a whole range of other fresh
products, particularly produce, fruit and vegetables, of course
has gone up very quickly as an immediate response to the GM scare
back in 1998-99. Before then, organic was very much a niche product,
it was not growing very much at all. You had your hard core of
committed organic consumers, but what GM did was to make a lot
of people really quite afraid or concerned about the use of pesticides,
chemicals, what-have-you, and there was an emotional reaction
against GM which really impacted on organic. People began to eat
organic or look at organic or consider organic especially for
their children because of a fundamental belief that it was safer.
Sir John Krebs, as you may be aware, has said quite plainly that
there is no scientific evidence for that whatsoever. That does
not in any way shake the belief of those who really do sincerely
believe that something that is grown under organic conditions
cannot—
Q106 Chairman: Are you using the
adjective "emotional" as a proxy for illogical?
Mr Hawkins: No, not illogical,
I think just a belief which certainly organic farmers and organic
growers and people like the Soil Association would have. They
would say that it must be safer for you if you are eating products
which do not have these chemicals being sprayed on them to make
them grow faster and, on a priori reasoning, you would think that
was the case. It is quite simply that Sir John Krebs is pointing
out that there is no scientific proof of that. That is not to
say that there will not be one day but, as we sit here at the
moment, there is not.
Q107 Mr Mitchell: It is a fetish,
a kind of religion really, an obsession on the part of some people,
but let us move on from organic to free range. There is also a
cult of `free range' and the consumption of free-range eggs and
chicks/birds is going up, is it not?
Mr Hawkins: It is.
Q108 Mr Mitchell: Is that going up
because you are promoting free range, or is it going up because
the consumer actually thinks that these are somehow purer, cleaner,
sweeter, nicer and kinder?
Mr Hawkins: Yes, but there are
two things. No one has mentioned it so far, so I think I need
to log the fact that the egg market is in decline in the UK. Consumption
has dropped by something like 20% in the decade 1990 to 2000.
Those are IGD figures, not Safeway figures. So, it is a declining
market and, like many declining commodity markets, it is price
sensitive and egg sales are responsive to promotional activity.
In the last year, we, Safeway, have seen—and I think this
may be reflected in the experience of other retailers, it may
not be—a 6% shift of our sales from caged to free range.
Q109 Mr Mitchell: And you have set
out to encourage that?
Mr Hawkins: We have set out to
encourage that, but we have used the direct incentive of putting
more promotional activity into free range, so that people have
a price incentive to buy it. I that is probably the main reason
why we have seen that shift in sales. It may well be—there
is no way one can really test this—that some of that shift
may be attributable in part to concerns about welfare.
Q110 Mr Mitchell: Do you make a bigger
margin on free range?
Mr Hawkins: I would not have said
so. There may be a slightly bigger margin, but of course the production
costs are a lot higher because the whole production process is
much less intensive. I think that the price range at the moment
is something like 49 pence per half-dozen for economy eggs, which
are obviously produced by caged birds, and something between 80
and 85 pence per half-dozen for—
Q111 Mr Mitchell: Farmers' Weekly
reported that the average price in the leading supermarkets for
standard two times six packs in May was 88 pence for one dozen
medium-sized value eggs, but £1.49—and that is substantially
higher—for one dozen medium-sized free-range eggs. Why is
there such a big gap?
Mr Hawkins: You have to be a little
careful with using these product descriptions because, if you
go into most supermarkets and even into Waitrose who I think only
sell free range, you will find six or seven different grades and
different names for eggs: barn eggs, free-range eggs, organic
eggs and there are probably several different ones. It frankly
depends on which of those Farmers' Weekly have taken because
you can choose one at the top of the range to make a point. What
I am saying is that our free-range price on average is the price
I have quoted.
Q112 Mr Mitchell: What effect do
you think higher-producer costs as a result of welfare legislation
will have on the amount you are prepared to pay for eggs? Will
you, as I was arguing earlier, import more from cheaper producers?
Mr Hawkins: Currently our import
proportion is virtually non-existent for Safeway and the whole
industry is very heavily still British. If I can answer that question
simply by reference to the ongoing debate in the industry about
the move to enriched cages or the possible proposal to inhibit
caged production altogether. It is quite clear that the industry
needs a firm steer as to which of those directions we are taking
because, at the moment, we are working on the basis that we will
be moving to enriched cages in 2012 but we have also heard that
there is a possibility that that date may be brought forward to
2008. Clearly, moving to enriched cages means quite a heavy investment
on the part of the industry and, if the Government are minded
to say that as from a particular year, 2010 or whatever, they
are moving to the abolition or the prohibition of caged production,
then clearly the industry needs to know that quickly in order
to save itself a lot of wasted investment.
Q113 Chairman: Thank you very much,
Mr Hawkins. We are going to conclude the inquiry at this point.
We do have one or two areas that we want to explore, but we will
put that in writing to you; they will be in the public domain
and so will your response; it has to be as satisfactory as a question
and answer session. If there are points that, on reflection, you
feel you would want to add to your past answers that you have
made so far, we would be delighted to receive that information
as well. Thank you very much indeed. We are sorry that it has
been interrupted.
Mr Hawkins: I could not even finish
my answer but I will in writing.
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