Fred'll fix it

Q I have often wondered why retailers and wholesalers don't have to pay the levy as we small processors do? After all they benefit from the work that the raised money pays for. It just seems unfair. Come to think of it, what does happen to all the money raised? DG

A Retailers and wholesalers do pay - and so do catering butchers - but not directly. There are around 300,000 retailers and caterers. There is no cost-effective way to capture levy from all the various foodservice outlets. And adding all retailers, including butchers and independent grocery stores, would significantly increase the number of levy collection points, making levy collection costs unacceptably high.

There are fewer than 300 abattoirs in the whole of GB, so the point of slaughter is by far the most efficient collection point. Charging back their share of the levy to the 100,000-or-so producers is relatively simple for those abattoirs who buy through livestock markets and for those who purchase stock direct. The payment is simply deducted. Retailers and wholesalers pay the red meat levy indirectly as part of the product cost charged by the processors or producers they buy from. It is a simple matter of market and supply chain economics. In reality, levy costs move up and down the chain according to the relative strength of the buyers and sellers in the chain. In fact, when the food chain works efficiently it is consumers that bear the cost of the levy within the price of the red meat they purchase.

Levy rates are paid on each animal and are set by law and approved by ministers. The levy is charged to farmers and processors by the Agriculture & Horticulture Development Board (AHDB), the red meat section of which was formerly the Meat & Livestock Commission. All six agricultural and horticultural sectors covered by AHDB pay a levy and not just the meat sector.

The levy monies raised each year fund the proposed strategic plans of AHDB's six sector advisory boards, including EBLEX and BPEX. These plans and levy rates are then published in a draft AHDB Corporate Plan, on which the industry is consulted. Following the consultation process, the proposed levy rates are put to Defra and devolved administration ministers for approval.

The only levy rate change for the 2009/10 financial year applies to the English pig sector, where the former producer levy rate of 85p per head is being reinstated following a 10p/head reduction, applied during the 2008/09 year in recognition of the problems that the sector was facing at the time. The market is now stabilising and so it has been decided, following industry consultation, to reinstate the full levy to deliver the BPEX proposed programme of activity for the English pig sector. The levy rates for the other five AHDB sectors remain unchanged from the 2008/09 rate.

Trying to avoid payment is not advised, as late payers are charged 10% more.




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