Cheap tactics by supermarket discounters

UK - Tertiary brands passing off low-welfare foreign pork as British are making an unwelcome return to supermarket shelves.
calendar icon 13 August 2006
clock icon 6 minute read

GOLD STANDARD CLUB

In marked contrast to the discounters, Porkwatch found excellent support for high-welfare, assured British pork in its three GOLD STANDARD stores, Waitrose, Budgens and M&S.

• All have great figures for fresh pork.

• It is worth highlighting the increase in M&S British bacon stocking in the latest Porkwatch survey.

• Representations continue to be made to Waitrose regarding use of the Quality Standard Mark on its packaging.

• Porkwatch hopes a policy decision to use the Quality Standard Mark on Budgens’ ham is in the offing.

• All three of these retailers performed very well in BPEX's recent country of origin labelling report with exemplary unambiguous origin labelling on their pork products.

This time the culprits are the hard discounters, who have already captured five percent of the British grocery market and continue to grow in importance. When it comes to supporting high British standards, Netto is the best of the bunch, according to the lastest Porkwatch survey.

But it is using its own ‘Ashfield Farm’ brand on fresh pork, which sounds British but in reality is ‘Product of the EU". Similarly Lidl has its Strathvale brand, which is clearly intended to sound Scottish but is, yes you've guessed it, "Product of EU".

Porkwatch auditors could find NO British pork OR British bacon OR British ham in any of the Aldi or Lidl stores they visited.

TESCO

Tesco disputed Porkwatch's results from previous surveys. The latest survey shows 85 percent of packs on shelf are British. Tesco claims the true value sales figure is just over 90 percent. It is ahead of the market with 41 percent of bacon on display being British but behind the market on ham with a figure of only 21 percent. Whilst not a feature of Porkwatch surveys it is good to report Tesco has relabelled all its Finest sausages with the Quality Standard Mark well displayed. It also deserves credit for being the main mover among the Big Four in pushing up some retail prices; without price inflation in the market it is difficult to see how producers can see a sustainable deadweight price increase.

ASDA

Asda achieved its highest Porkwatch survey result for some time on fresh pork with 78 percent now being British, a result of successful NPA lobbying to remove tertiary low welfare pork. Its bacon and ham figures remain low, although a change in sourcing of its Butchers Choice bacon is expected soon. Its ham category has only 11 percent British lines and needs to be a focus of attention. The recent BPEX labelling survey revealed some Asda ham products have poor origin information, using "Produced in the UK" and indicating the place of processing rather than source of the pork.

SAINSBURY'S

Worse than the market average with only 75 percent fresh pork British. This is a result of its policy to source cheaper low welfare pork loins sold under tertiary brand labels. Discussions have taken place to remove the worst excesses of poor labelling practice, and these will continue until Sainsbury’s has the confidence to sell all its fresh pork under its own label.

MORRISONS

Up there with Tesco as the best of the big boys, having 85 percent British fresh pork on shelf. Morrisons has in-store butchery and packing and this can lead to the Quality Standard Mark being left off packs of fresh pork. A debate is continuing to persuade Morrisons to take the Quality Standard Mark on bacon, sausages and ham, which it packs at its own processing plant.

SOMERIELD

Only half of Somerfield's fresh pork is British, and hardly any of its bacon. It has just been bought by a venture capital consortium so it is a waiting game to see what its retail strategy will be for fresh food. Disruption in the buying team adds to the uncertainty.

CO-OP

A fruitful meeting between the Co-op and NPA produced a number of commitments, including the delisting of "Waterside Farm" pork from France. Co-op has an above average share of British bacon but its range of British ham has shrunk over the past year.

SUMMARY

There was a slight recovery in the amount of British fresh pork on retailers' shelves during July to an overall 79 percent. This is about the same level as a year ago and represents an uplift from the lowest level ever recorded in our Porkwatch surveys in May 2006 of 72 percent. The share of British bacon and ham on shelf remains stubbornly around the same 30 percent level. Some retailers have given pledges that if more British product were available they would stock it, and processors are reportedly short of legs in fairly large numbers.

It will be interesting to see whether these reported shortages of British pigmeat compared to demand finally persuade some supply chains to do the obvious thing and secure future raw material supplies through contracts. There is an encouraging increase in commitment to using the Quality Standard Mark on pack, with the vast majority of British pork having the Mark displayed. It is now on nearly 60 percent of all packs of British bacon and ham.

Sainsbury driving down prices

Over the last year there has been a marked increase in the amount of meat sold on promotion. Currently about a quarter of all meat sold is on a promotion. Whilst the drive upwards is across most retailers, the trend is being driven by Sainsbury’s. In some cases more than half its meat is on special offer. The danger is that Tesco and Asda will feel the need to follow Sainsbury’s lead.

But why sell meat this way? Extensive work has been done on consumer decision trees and it indicates that in general meat is something consumers will buy anyway. Promotion on meat, for most of the population, is not a driver of sales. However if consumers are offered a strong enough deal they will take advantage of the offer.

Deals are now getting stronger with multi-buy promotions much in evidence. This increase is exerting downward pressure on farm prices and inevitably will suck in imported product. Whilst most people are not promotionally driven, there is a percentage of floating consumers who shop for promotional offers. Retailers target these consumers with cheap meat.

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