NPA blasts Cranswick's actions

Cranswick’s decision to walk away from the Deadweight Average Pig Price (DAPP) system is a blatant move to source cheaper pigs, the chairman of the NPA has claimed.

Richard Longthorp said Cranswick had claimed that particaption in the DAPP was anti-competitive, but he dismissed the claim, and said the move was a blatant attempt by the processing giant to destroy the DAPP and break it’s DAPP based contracts with suppliers.

“The DAPP is not in breach of competition laws, and claims that it distorts the marketplace are wrong. It’s a price reporting system, not a price setting system - it’s up to the processors to decide how they use the information supplied in the DAPP to set their own contracts.

“Cranswick are simply trying to destroy the system to walk away from their DAPP contracts.”

He said that claims by some in the trade that the DAPP system was flawed had been addressed by Bpex, which had been in the process of presenting an alternative scheme when Cranswick walked away. “That option was offered to the processor but they didn’t want it. The reason that Cranswick are doing it is that they want cheaper pigs.”

He called on the processor to return to negotiations: “We should have a sensible adult discussion, rather than throw rattles out of prams. We need to sit down and discuss how this works. But it’s a bad place to start when one party has walked away.”

The decision by Cranswick resulted in the sample size of the DAPP falling from 115,000 pigs a week to 78,000. The weekly kill for UK product is around 190,000.

Bpex and the NPA said the sample size remains robust enough for the DAPP to continue to provide statistically accurate prices, but they would continue to work on an alternative scheme to provide a robust, transparent and auditable price reporting mechanism.

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