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Why we'll fight for our premium (and win)

by 5m Editor
19 October 2004, at 12:00am

UK - The suggestion from a processor this week that the British premium may be a thing of the past has provoked an unequivocal response from producers. "If that's a challenge, we accept it!" declared Richard Lister, chairman of NPA Producer Group.

National
Pig
Association

National Pig Association
THE VOICE OF THE UK PIG INDUSTRY

NPA is active on members' behalf in Brussels & Whitehall, and with processors, supermarkets & caterers - fighting for the growth and pros-perity of the UK pig industry.

"I am not convinced the premium is at risk, although I agree it will come under pressure as a result of the current intense competition between the leading supermarkets. I am clear that British producers have a product that is worth a premium. We will fight tooth and nail to maintain it and neither I nor my colleagues have the slightest doubt we will be successful."

This summer the premium fell from 20p a kilo to zero in just three weeks, and although prices have improved, the premium has yet to recover any of its lost ground.

Producers are inclined to accept that a 20p differential may have been unsustainable but they are clear that in addition to being essential for survival a 10p premium would represent good value to all links in the pork chain, including customers.

NPA chairman Stewart Houston said today, "We have a good product to sell: it is different from the pork the rest of the world is producing and it is up to us to market it well so that it continues to earn the premium it deserves."

In contrast to only a few years ago when take-it-or-leave ultimatums were common, leading processors are now more inclined to treat pig producers as equal partners in the chain, and to work with them to find a sustainable route through the difficult trading months (perhaps years) ahead.

But although welcoming this approach, producers expressed concern this week that some processors are in danger of sacrificing the British premium too easily in the face of a hardening attitude among supermarket buyers.

"Perhaps because there is that bit of extra water between us and the retailers, we are able to fight our corner more effectively," said Richard Lister who, with four breeding units totalling over 3,000 sows, is one of Britain's largest producers. "But I would urge all processors to support us where they can because this fight is as much for them, as it is for consumers and pig producers."

Recent surveys by Imperial College London and the British Pig Executive have shown most shoppers value fresh British pork and the vast majority do not agree with retailers selling imported pork produced in a manner that would be illegal in this country.

Mike Sheldon - who is one of the producers who determines how British pork is promoted to shoppers - said today he did not believe the British premium was a thing of the past. "I am sure it will recover, although it might be a few pence a kilo lower, on average, than the previous average."

He said he attended a meeting with a leading processor this week expecting to be given bad news, particularly after the way processors had rolled pigs back during August, creating serious problems on many pig farms. "But by the end of the meeting I was actually quite positive. The processor concerned was not going to do me any favours but at least there was a genuine effort to consult me which is a considerable improvement on the old days of take-it-or-leave-it."

Nevertheless, the National Pig Association said today that though it would continue to work with processors towards improved partnership in the pork supply chain, it would challenge any attempt by processors to give away the British premium or to move from long-term contracts.

NPA is particularly keen to urge the Danish company Tulip - a newcomer to Britain - to maintain long-term contracts, to recognise the values that underpin the British premium, and to make every effort to maintain the premium, even if at this early stage it is alien to the Danish experience.

The NPA's pledge to maintain the British premium is welcomed by those Dutch and Danish producers who have invested in production facilities that meet British standards. These producers have stressed that the British premium is essential to them because of the extra costs incurred when producing pigs to higher British standards.

Source: By Ian Campbell - National Pig Association - 17th October 2004

5m Editor