Retailers accused of breaking pork promises
National Pig Association chairman Stewart Houston has written to all main board directors of the country’s leading food retailers to outline the crisis in UK pork and accuse them of going back on their corporate responsibility claims.
It is understood that he has warned that if producers are not paid a fair price, many will quit the industry in the remainder of 2011.
The letters quote extracts from the retailers’ published corporate responsibility statements and point out that the current situation of paying farmers less than their cost of production runs counter to these statements.
And the letter already seems to have had an impact – with Sainsbury’s pledging yesterday to pay an additional discretionary payment of 5p/kg until 1 August, or until the deadweight average pig price (DAPP) stablises to £1.50/kg.
The letters have been addressed to both executive and non-executive directors of the country’s top food retailers. Non-executive directors involved include: Martha Lane Fox, the co-founder of lastminute.com, who is a non-executive director of Marks & Spencer; Anna Ford, the former newsreader who has a similar role at Sainsbury’s; and Tesco non-executive director Karen Cook, president of Goldman Sachs Europe.
“This is a supply chain problem which needs the co-operation of the whole supply chain if it is to be successfully resolved,” Houston is believed to have written.
Since the doubling of the price of wheat caused pig feed prices to soar last August, producers have faced mounting losses. Indeed, while their costs were going up, the price they were being paid for pigs actually dropped and, at one point, farmers were losing more than £20 for every pig produced.
As part of their campaign to get retailers and processors to pay a fair price, producers have staged a mass rally in Whitehall, lobbied Parliament while taking their case to the Secretary of State, and handed in a petition to Downing Street.
Although producers have gained a marginal increase (literally a few pence per kg) from processors in recent weeks, the campaign has yet deliver the meaningful increases needed to stem the heavy losses producers continue to suffer.
Recent meetings of producers around the country have made it clear the industry is at a watershed, with producers already considering tough decisions to quit or scale back production with long-term implications for supply.