Breakaway Producers Pledge to Pay More

by 5m Editor
4 September 2008, at 8:16am

DENMARK - Five of Denmark’s largest pig producers quit Danish Crown earlier this year in a very public row over the chronic poor prices the cooperative pays its members.

They formed Danpork and pledged to pay Danish producers at least 13p a kilo more than Danish Crown.

Danpork has been as good as its word and now says it is ready to take on more Danish suppliers who will get around 27p a kilo more than the Danish quote.

This will mean an extra £300,000 a year for a large unit producing 35,000 pigs a year, says Danpork manager Steen Thaysen.

Danpork is sending its pigs to Germany for slaughter. Its first shipments returned suppliers 130p a kilo, with all transport and administration costs deducted.

Following this promising start, Danpork is now seeking 20 new shareholders to help grow the company, which has its sights on a ten percent market share.

Until recently, Danish Crown was able to pay producers pretty well what it liked, because it had almost a monopoly on slaughtering in Denmark. But the co-op is now coming under increasing pressure to improve its game.

In addition to Danpork, another new competitor in the market is Moesgaard Meat which has a slaughterhouse in Jutland. Like Danpork, Moesgaard Meat was set up by producers who previously supplied Danish Crown.

Other recent challengers to Danish Crown’s dominance include Jutland Meat Company and German meat processor Tönnies. The extra competition is expected to mean further cut-backs in Danish Crown’s slaughtering and processing capacity.

5m Editor