Tesco and Sainsbury pledge better support for meat producers

Britain’s big retailers have responded to calls for help and agreed to work more closely with their domestic suppliers in the red meat sector to help improve their profitability.

Tesco and Sainsbury told the Red Meat Industry Forum (RMIF) last week that they would work with farmers more closely in future. Tesco’s commercial director for fresh producer Steve Murrells, told beef producers: “We have a responsibility when we are so large to help support and grow your businesses - but [the responsibility] is two-way.” Sainsbury’s director of fresh foods Karen Schenstrom agreed.

“We have to reward people who are producing quality product and deincentivise those who are producing poor product,” said Murrells. “But I wouldn’t want to call it cost plus or cost minus.”

Schenstrom expressed frustration with how “unconnected” the whole red meat supply chain is with what consumers want. And Asda’s agricultural manager Dr Chris Brown said: “Unless we concentrate on whole chain success, we are going to fail.”

The retailers were responding to RMIF chairman and Meat and Livestock Committee (MLC) chairman Peter Barr, who said: “With size comes responsibility and that should mean the big retailers, together with their processors, have an obligation to assist their British livestock producers to ensure consumers can buy British Meat in years to come. Too many of our sheep, beef and pig farmers are not getting fair value.”

Beef and lamb producers are suffering particularly at the moment from low margins and problems caused by cheap imports from countries such as Brazil. However, the problem of cheap beef imports from Brazil has been alleviated slightly in recent months because of a ban on imports from three Brazilian states that are suffering from foot and mouth disease.

The news from the big multiples was welcomed by MLC director general Kevin Roberts who said: “This could be a turning point for the industry with all links in the supply chain accepting their responsibilities to make it work.”

While costs savings of between £500m and £800m have been identified across the whole supply chain through independent research carried out by Imperial College on behalf of the RMIF, improvements to date have mainly been made post farm gate.

In one business improvement project, pork meat processor Welsh Country Foods, part of the Grampian Country Food Group, achieved savings of £185,000 a year, said site director Trevor Hanger. “We identified that we could enhance meat by genetic selection,” said Hanger, whose plant processes about 3,000 pigs a week.

Often farmers fail to produce meat to the quality specifications that retailers and their customers want. Just 40% of beef supplied to Tesco meets its specification said Murrells. “Producers must understand what the end user - the consumer - wants … fact,” said RMIF operations manager Paul Jose.

However, there are also issues around consumer education that may need to be addressed. Marbling of beef, for example, where fat is distributed throughout cut of beef, improves taste, but it can put shoppers off. “When there is visible marbling on a piece of beef they tend to leave it on the shelf,” claimed Brown. But Schenstrom “fundamentally disagreed” with this view.