Supplementary memorandum submitted by
the British Retail Consortium (Pigs 25a)
I would be grateful if you could provide
the Committee with a breakdown of price increases between August
2007 and August 2008, illustrating how the increases in cost and
retail price are shared along the supply chain.
In my oral evidence I explained that the BRC
has been tracking farmgate livestock prices and retail meat prices
to demonstrate that farmers had earned a larger proportion of
the share in the chain, during a time of rising prices. For obvious
reasons, as in all supply chains costs increase through the chain,
due to increased labour, energy, property and other costs, hence
it is better to look at % increases in price.
Using BPEX published figures in September, the
deadweight average pig price (DAPP) increased to 137p/kg in August
2008, compared to 109.8p/kg in August 2007, an increase of 24.7%.
At the same time, using ONS published figures the retail price
of bacon increased from 645p/kg to 693p/kg an increase of 7.4%
and pork loin rose from 496p/kg to 566p/kg in the same period,
an increase of 14.1%.
Retailers, through competition and promotion
have kept the price increases to consumers to a minimum whilst
not penalising farmers, a point that is demonstrated by the increase
in their share of the final price. Using the same approach as
the one used by the Competition Commission in their recent report
on the grocery sector, which analysed the pig supply chain (Appendix
9.5) this is demonstrated below.
| | Pork Loin
| | | |
| Bacon | |
|
| August 2007
| August 2008 | August 2007
| August 2008 |
| p/kg | Share %
| p/kg | Share %
| p/kg | Share %
| p/kg | Share %
|
| Farmgate pig-meat price | 109.8
| 22.1 | 137 | 24.2
| 109.8 | 17 | 137
| 19.7 |
| Processor cost and retail margin | 386.2
| 77.9 | 429 | 75.8
| 535.2 | 83 | 556
| 80.3 |
| Retail price | 496 |
| 566 | | 645 |
| 693 | |
| |
| | | |
| | |
What proportion of imported pigmeat do you estimate would meet
UK legal welfare standards?
It is difficult for the BRC to be too precise in this answer
for two reasons. Firstly, we do not have access to the current
figures of where imported produce is sold and secondly, the BRC
does not represent the whole of the retail sector. However, the
BPEX report of 2005 regarding imports estimated 60% of imported
pork is sold through retailers. The BRC represents approximately
80% of grocery sales in the UK and our major members have all
confirmed that their pork is produced in conditions that would
meet UK legal standards.
This means we would estimate that at least approximately
50% would meet legal welfare standards. That figure, of course,
could be higher, depending on the sourcing policy of the hospitality
sector and non-BRC retailers but we can't comment on their behalf.
Do all your members only buy and sell imported pork that meets
UK welfare standards? Did you mean legal standards or BPEX quality
standard meat when you referred to pork that retailers buy here?
All of our major members have confirmed that all their pork
meets legal UK welfare standards. The key issue which was raised
in the inquiry was the use of stall and tether in pig production
which is banned in the UK. Our members have confirmed that they
do not take pork or pork products from totally confined systems.
Not all of this meat would meet the requirements of the BPEX
quality scheme. For example, castration which is legal in the
UK and routinely used in Europe is not allowed under the BPEX
scheme. For those customers that are particularly interested in
compliance with the BPEX scheme, our members do have those products
clearly marked with the quality scheme label.
How might the consumer be educated to distinguish between meat
that has been reared in the UK, or in accordance with UK welfare
standards and meat that has not?
In terms of meat that is produced in the UK our members make
it very easy for consumers to choose it. As well as providing
country of origin, which goes beyond legal requirements, they
use descriptions in the label such as British ham from British
pigs, and use clear labels such as the Union Jack or the Assured
Food Standards red tractor label.
By sourcing imported meat that is not from stall and tether
systems they have also helped consumers in not having to choose
between products on basic welfare issues. Research shows the bulk
of consumers do not put welfare issues high in the list of decision
making when choosing a product. It is also difficult to communicate
detailed welfare issues to consumers, but supermarkets did not
want UK farmers to be penalised, hence their decision on equivalent
sourcing requirements.
Andrew Opie
Director of Food Policy
November 2008
| 
