Examination of Witnesses (Questions 220-225)
MR ANDREW
OPIE AND
MR DUNCAN
SINCLAIR
27 OCTOBER 2008
Q220 Chairman: What are the areas
that need to be cleared up if good supply chain relationships
are not to be marred by simply putting money in competition lawyers'
pockets?
Mr Opie: I think the simplest
thing to avoid is too much discussion around ultimate price between
retailers, because that is the thing that is going to end in trouble.
The problem is, most of the farming groups are, quite naturally,
lobbied by their members because their members want to earn more
money, so the first thing they want to talk about is the price
that is paid for particular products, and that is a tricky subject.
Q221 Chairman: Let us move to the
question of this Pig Task Force which the Scottish Executive established.
Our previous witness, who nosed up to it but was not let in through
the door, could not help us in identifying what it was supposed
to do. Can you help us? What is it supposed to do?
Mr Sinclair: I do not have any
details of it.
Mr Opie: One of my Scottish colleagues
is on the task force, and I think they have had only two meetings
possibly up to now. The competition issue aside, because there
is a risk if you get all the potential buyers of pork together
with all the potential sellers of pork, you could run into issues
there, the two positive issues which she felt it has developed,
thus far at least, is first a better understanding of what everybody
is doing within the chain at the moment, and we have been through
some of the issues today and she said they found that incredibly
useful, to get people round a table and say what their interests
were going forward, so that has been one thing, a better understanding.
The second is to identify some of the issues, which I know you
have discussed previously in this committee, around things like
carcass balancing, for example, and promotion of certain parts
of the pig, which might help the pig farmers maximise the price
that they can get, so some of the traditional issues which maybe
through the Levy Board they are bringing together in a wider forum,
hopefully at some point to include both hospitality and retail,
and therefore bringing all the sellers and users of pork forward,
but it is in its early days at the moment.
Q222 Chairman: At the risk of saying
that the solution to every problem is starting up another official
initiative, is it worth having one for England? I sense, Mr Opie,
the answer is perhaps not.
Mr Opie: I am really not sure
whether it is. I am looking at the inquiry you are having now.
You are having an inquiry when actually pig farmers are doing
relatively much better than they were six months ago, and I think
the whole starting point of your enquiry is, is pig farming a
cyclical business and are we in a peak or a trough at the moment?
I am not sure, therefore, whether you would achieve all of the
things that you would hope to do that you are not already doing.
Maybe bringing in all of the people who do not normally voice
an opinion or are not normally there into the conversation might
be useful, but I am not sure.
Q223 Chairman: Let us turn to carcass
balance. Mr Sinclair, in your evidence you make particular reference
to the work which Waitrose has done on that. You are obviously
aware of its importance in terms of the overall economics of pig
production, so perhaps you could talk about what you have done,
what lessons there are to be learned, and, Mr Opie, you might
talk in more general terms about how the industry can improve
the utilisation of the carcass, what the barriers are to progress.
Mr Sinclair: A fundamental issue
for us in terms of maximising the value and return from the carcass
is to make the most use of all the individual parts, so what we
have is a product that is for fresh retail sale, and then we have
the same provenance in that it is the same product that is then
used for sausage, ham, bacon, and in our ready meals and ready-to-cook
meals. So we are using the same provenance and the same quality
in the processed product area as we have in the fresh product,
and that is something we do not only in the pigmeat sector, but
also for lamb, beef and in other sectors.
Q224 Chairman: Would you like to
hazard a guess as to what percentage of the carcass, the meat
supplied to Waitrose, is utilised?
Mr Sinclair: I do not have specific
figures here with me, but I could try and get them for you.
Q225 Chairman: It would be really
helpful to be able to compare them with the overall picture that
we gained from BPEX just to get an idea if somebody is positive
of what you can achieve. Mr Opie, what about the wider industry
barriers to progress in this area?
Mr Opie: One of the benefits we
have seen from the credit crunch and people looking at the price
is that we have been able to market a lot more some of the cheaper
cuts of pork, for example, which we found it harder to sell previously.
If you look at the MLC's figures in terms of the sales of pork
cuts, for example, things like belly and pork mince have really
shot up over the last year. That has been a great opportunity
to supermarkets to bring both value and a better carcass balance
into the equation. I guess the problem is that some retailers
will maybe over-trade in one particular area for British pork,
it could be bacon or ham, for example, and that would be their
big selling point with their customers, because that is important
to their customers, and therefore a lot of the issues about carcass
balancing, both in terms of making the most of the pig and some
of these bits of the pig that none of us in the UK particularly
wants to eat is with the processors, because pork trade is a global
issue as well as being a UK or an English issue. Therefore, whilst
retailers can continue to promote some of the cuts which we traditionally
have not eaten so much here, which will definitely help, I think
ultimately the processors are best placed to try and help the
whole industry in terms of maximising the carcass balance.
Mr Sinclair: Can I just follow
on from that, because it ties in neatly with the current economic
circumstances? We have recently launched a "Forgotten Cuts"
campaign and have enjoyed quite a lot of publicity from that.
It is putting products like pig cheeks back on our service counter,
as well as pig's trotters, lamb shanks and beef cheek. So it is
something that we believe is an opportunity to look again at some
of these cuts that were used traditionally. Some of my colleagues
have been back looking at some of the 40- and 50-year old cookery
books, looking at different recipe ideas and supporting this initiative
with some of these recipes, and after two weeks of sales it seems
to be going quite well. It is going to be a small proportion of
sales but I think it demonstrates what is possible.
Chairman: Gentlemen, thank you very much
indeed for your contribution, both oral and written, we are most
grateful, and thank you for agreeing to supply us with some additional
material.
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