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The market for welfare-friendly bacon and eggs
By Dr John Strak - Animal welfare regulations are back in the news this month with the champion of animal welfare and Junior Minister at DEFRA, Elliot Morley, announcing that he will hold a public consultation on banning battery cages for chickens in the UK. This month’s Strak report will consider what can be learnt from UK’s previous unilateral moves to improve animal welfare for pigs. This allows me to answer the question, is there a commercial opportunity for pig farmers who want to produce welfare friendly bacon and eggs?|
Dr John Strak
Dr Strak's views on the UK and global pig markets are produced in Whole Hog every fortnight. For more details click the link at the foot of the article. |
But customers’ views can be confusing when you compare what they say and what they do.
The evidence that consumers aren’t, in fact, prepared to pay for animal welfare comes from several sources. One recent example can be found in the RSPCA’s Freedom Food Gallup survey of consumer views on animal welfare in the UK which was published at the end of last year.
The research showed that more than three quarters of those interviewed said that they would pay a premium of 10% or more for welfare friendly food. However, Freedom Food was less happy about consumers when they put their hands in their pockets.
Mike Sharpe, managing director of Freedom Food summed it up when he said, “Research tells us that the consumer says the rearing methods of the animal are the most important issue for them when purchasing eggs, meat, poultry and dairy produce. They also claim they would pay extra for products from high welfare systems. But the fact is that too many shoppers appear to leave their ethics at the supermarket door. If all the consumers who say they want to buy higher welfare products actually did so, on a regular basis, the whole structure and landscape of British livestock farming could change.”
So, if the RSPCA can’t get British shoppers to pay a premium for welfare friendly production methods who can?
The answer to this, in my view, is that everyone can - up to a limit. But the limit is probably less than 10% of the population because it’s a segmented market and it needs a segmented approach.
Asking Brits in a survey if they think animal welfare is important is like asking Brazilians if they like good football. Of course everyone in the UK thinks animal welfare is important but the key test will always be when the shopper signs the credit card or counts out the pence from her purse. In my view, even with increased labeling transparency, price will dictate that welfare is a minor segment of the marketplace.
I think that this is known and accepted even in the higher reaches of DEFRA. When price is in conflict with ethics price tends to win. If this were not so we would all drive the most economical cars, buy eco-friendly potting compost, and not look twice at imported hardwood from tropical rain forests. Has anyone looked at the shelf space that “Fair Trade” coffees occupy in their local supermarket? A lot less than 10% - and that tells a story. Selling “conscience” products isn’t a straightforward matter.
But the fact that shoppers might be schizophrenic about animal welfare and ethical products is not a reason for ignoring these issues. Clearly, if McDonald’s or any other major customer of the pig industry thinks welfare is an important issue then that’s enough to get this into the priority box. And we mustn’t forget Mr Morley’s ambitions.
The key point is that most pig farmers in the UK have not been able to obtain a premium for welfare-friendly products in the marketplace – and in the long term this is unsustainable. That is a message that has not been absorbed by some pig farmers – and most of their customers. A final observation I would make about the fairness (or otherwise) of the impact of animal welfare legislation on the UK pig industry concerns the apparent disconnection in the minds of regulators and shoppers between what happens to their domestic producers and what happens to foreign suppliers.
Despite all the good work done by producers to heighten awareness to welfarefriendly sources of pigmeat the UK’s imports of pigmeat from abroad have soared in the last three years. (And I would predict that the same import growth would occur in the egg market if Mr Morley introduces a unilateral ban on battery cages.) Most of these pigmeat imports will have come from suppliers who do not produce pigs under the same conditions as UK producers but noone in Government or in the consumer pressure groups seems to have batted an eyelid about this. All of this may seem unfair but business is like that sometimes.
The crucial thing is to learn from this. The important lesson for the UK’s pig farmers is to see that the market for pigmeat and its welfare regulations are operating in a certain way – welfarefriendly pigmeat is a minor segment of the total market and it will be for the foreseeable future.
In order to maximize profits producers need to act according to this (realistic) framework and not according to some idealized view of how consumers spend their money. Unlike some politicians (who don’t have to sell a single packet of bacon to ensure that their salaries are paid) I am sure that commercially- minded pig producers can see what consumers are prepared to pay for - and take the appropriate actions. One thing is for sure – this is not the time to move into welfare-friendly bacon and egg production in the UK........
See you next month
Reproduced courtesy
