FRANCE - French pig meat buyers are holding back, writes Peter Crosskey, while consumers are trading down.
Last week’s Marché du Porc Breton (MPB) Thursday auction price of €1.68 per kg marked a €0.06 per kg weekly rise against a long term upward trend since April.
Evidently, having had “reassuring news” from other pig production areas, those at the sale (including the MPB economist) were surprised that the slaughterers were sluggish in their bidding.
As the only French pig auction to be reported directly nationally, it is possible that buyers might not want the headline price to be seen to rise unduly, even though markets across Europe have been strengthening.
This year, MPB has seen fewer price swings and has generally traded above last year’s rates, with around 9,000 fewer head presented every week than 2012.
French consumers, however, are trading down too: MPB quotes TNS panel data to April this year, noting a 2.6 per cent year-on-year drop in fresh pigmeat sales; a 7.3 per cent lift in sausages and a 1.4 per cent rise in charcuterie, 0.4 per cent of that for ham.
FranceAgriMer calculations (source as above) for the retail price compositions focuses on loins as the retailers’ mainstay, whether as roasting joints or pork chops. While the retail price point of €6.65 per kg has not moved from 2012 to the first half of 2013, the instore butchery counters managed to add five centimes a kilo to their gross margin €3.23 per kg), squeezing two cents per kg from processors and paying three cents per kg less for the raw material.
As a department, the retailers argue that on the basis of 2011 figures, butchery counters are nearly two per cent shy of making money on fresh meat, although charcuterie counters earned just over five per cent net of everything.
However, fresh meat counters, charcuterie and wet fish displays play a major role in animating stores and generating retail credibility.
What is more, consumers at a serveover will shop from higher margin categories elsewhere in the store, whereas high street butchers and charcutiers will not make incremental sales on the same scale.
Until recently, in-store butchery in France tended to be upscale. However, new store counters are noticeably less lavish and instore butchery is an increasingly frequent victim in refits.
French retail price composition for selected generic meats
|Change in cost at abattoir entrance (1)||Change in gross margin for slaughtering/cutting (2a)||Change in gross margin charcuterie (2b)||Change in retailer gross margin (3)||Change in retail price ex-VAT: (5)=(1)+(2a)+(2b)+(3)|
|Pork loin instore butchery|
|2013 first half||-0.03||-1.00%||-0.02||-4.00%||0.05||1.00%|
|Pork loin self service prepacks|
|2011||0.3||14.00%||Industry + retail combined (A) -0.07||-2.00%||-0.01||-0.10%|
|2013 first half||-0.03||-1.00%||0.06||-4.00%||-0.04||-2.00%||-0.01||-0.10%|
|Cooked ham: self service/counter|
|2013 first half||0.02||1.00%||-0.03||-4.00%||0.2||11.00%||-0.08||-2.00%||0.11||1.00%|
|2011||0.19||7.00%||Industry + retail combined (A) 0.01||0.20%||0.25||3.00%|
|2013 first half||0.25||7.00%||-0.02||-1.00%||-0.02||-1.00%||0.21||3.00%|
|Kitchen ready whole chicken|
|2011||0.16||14.00%||Industry + retail combined (A) -0.13||4.00%||0.29||9.00%|
|2013 first half||0.12||8.00%||0.01||1.00%||-0.02||-1.00%||0.11||3.00%|
|(A) No data to distinguish supplier and retailer gross margin that year.|
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