Row over pig profitability continues
Published:  02 March, 2012

Pig industry and retailer representatives have refused to back down in the row over pig industry profitability.

In an article for Meat Trades Journal (2 March), Bpex chairman Stewart Houston said that the BRC displayed “arrogance that beggars belief” when it responded to accusations of profiteering by suggesting that pig farmers should have thanked supermarkets for the profit the industry made three years ago (MTJ 17 Feb).

Pointing out that the UK pig herd has only had one profitable year since 2002, while supermarket profits have increased considerably, Houston said that he believed the contraction of the pig industry was a “direct result” of the abuse of power by supermarket groups. He criticised supermarkets for boosting profitability by increasing their own-label ranges, which can be sourced at lower input prices, and said that it was the moral responsibility of supermarkets to pursue a sustainable supply chain rather than short-term profits.

In response, BRC spokesperson Richard Dodds said the broad range of food and non-food products sold in supermarkets meant it made “no sense” to compare retailer profits with pig industry profits and claimed that retailer profit margins were “very modest” in comparison to other businesses.

Adding that global markets set the prices that pig farmers got for their meat, not supermarkets, he said: “If it really was the case that supermarkets did have the power to set the prices, we would expect the pig industry to be thanking us every time the money that they get for their pigs goes up,” he said. “But I cannot recall ever having heard that happening.”

Defending own-label products, Dodd said they were successful because they were valued by customers. “It is strong in pork and bacon, but that is a good thing because the retailers are strong supporters of the assured farming standards and they give huge support to UK farmers.”

He insisted that supermarkets were dedicated to a sustainable supply chain and pointed out that retailers were not the only destination for UK pork and pork products, with the food manufacturing industry, catering sector and government procurement also important buyers.

“The relentless and almost inevitable hostility that is directed at supermarkets by pig farmers is unfair and very surprising, given that there are these significant other destinations for their meat, which seem to escape all public scrutiny,” he said.

Read more:

>Pig industry hits out at retailers

>Bpex hits back at the BRC

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