Premier Foods faces dried soup price hike of +13%

10-May-2012 - Last updated on 11-May-2012 at 10:12 GMT

Related tags Meat

Complying with new EU rules on desinewed meat could cost Premier Foods and other dried soup makers a packet

Premier Foods and other dried soup manufacturers face price increases of more than 13% in the cost of meat powders, after an EU rule ordering poultry and pork desinewed meat (DSM) to be relabelled as mechanically separated meat (MSM) comes into force on May 26.

Dried meat powder specialist Richard Benson, md of ingredients firm FR Benson, told FoodManufacture.co.uk: manufacturers would have to absorb price rises of more than 13% in the cost of ingredients or stop making value-end dried soup after the rule is enforced on May 26.

Since chicken powder is a common ingredient in dried soups, manufacturers would have to chose between sourcing powder made from whole chicken meat or including MSM in the ingredients label, said Benson.

While using whole chicken would make margins unsustainable, many brand owners would not want to include the term MSM on food labels for fear of deterring consumers from buying the products, he added.

Batchelors dried soup

A spokesman for Premier Foods – manufacturers of Batchelors dried soup – confirmed that the firm used DSM in a number of products including dried soups and sauces.

But the firm stopped using ruminant DSM when the EU banned its use on April 28. The spokesman said Premier would switch to DSM-free chicken and pork powders after the May 26 deadline.

He was unable to confirm how much the change would cost Premier.

Benson said: “I expect to see a number of products disappear. It is so unnecessary … people have been using DSM quite happily for the past 10 years.”

Avoiding the use of MSM on food labels could cost food manufacturers more than 13%, said Benson.

Sourcing DSM-free lamb powders had increased its price from £12.18/kg (€15/kg) to £13.81/kg (€17/kg), he said.

The costs of substituting DSM-free chicken powder is likely to be even higher because more meat is used in this powder than in lamb powder.

Already one user of lamb powder has said it cannot afford the increase. Benson declined to name the user.

Dictatorship

Benson said the swift imposition of the new rule left food manufacturers little time to find cost-effective alternatives. “I don’t understand why the decision was made so quickly. To me, it smacks of dictatorship.”

A spokesman for the Food Standards Agency told FoodManufacture.co.uk: the decision to implement the rule was taken quickly because the European Commission had threatened to ban UK meat exports. “This could have proved devastating to the industry,” he said.

The FSA is currently assessing the impact of the new rules, he added.

The British Meat Processors Association has estimated the cost of complying with the label rules at £200M. Total costs included: sourcing suitable raw materials, re-labelling, reformulation and potential job losses.

Stephen Rossides, BMPA director complained: “The market implications of having to bow to the Commission are huge.

“All this has happened at breakneck speed,” he added.

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