Price-cutting to ravage red meat industry

The renewed focus of Britain’s leading retailers on cutting costs will seriously damage the nation’s red meat industry, Meat and Livestock Commission (MLC) chairman Peter Barr has warned.

Only last week Tesco launched its biggest price-led advertising campaign for 10 years, costing about £4M. This followed a move by Asda several weeks back to make around £250M worth of price cuts.

Leading retailers had been focusing more on quality over the past year and paying higher prices for red meat. But Barr feared this policy could be abandoned if fierce price competition re-emerged between big players such as Tesco and Asda.

While some retailers were acting responsibly, others were “slipping back to their old ways”, he claimed. This was resulting in “downward pressure on prices”, which disregarded the real costs of production.

Barr is concerned that without sustainable prices, the UK red meat industry could be all but killed off leaving the nation dependent on cheap imports. “Food security is not currently a fashionable topic, but it will be in coming years,” he warned.

Hillary Benn, the UK’s new secretary of state at the Department for Environment, Food and Rural Affairs, said Barr’s reference to food security was “absolutely timely”. It comes after his predecessor David Miliband’s announcement in June of a £98M package of support for the livestock sector designed to improve competitiveness, animal health and welfare, while raising efficiency of on-farm nutrient management. Dismissing criticism that being a vegetarian would adversely influence his treatment of the sector, he said: “We want to see a very successful livestock industry.”

The MLC will disappear from April 1 2008, when it, together with four other levy boards - the British Potato Council, the Milk Development Council, the Horticultural Development Council and the Home Grown Cereals Authority - will be replaced by the new UK statutory Agricultural and Horticultural Levy Board, chaired by John Bridge.