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Sunday, May 22, 2022

'Destruction of UK pig sector' looms unless Tesco pulls its weight, chain is warned

'Destruction of UK pig sector' looms unless Tesco pulls its weight, chain is warned

The chairman of the National Pig Association (NPA) claims Tesco, which has 27% of the UK market, is not paying enough for its pork supplies and that rivals have stepped up to help producers facing unprecedented losses due to soaring costs.

Tesco, the UK's largest supermarket chain, has been warned it must do more to help struggling pork producers or risk "the destruction of the UK pig sector".

The chairman of the National Pig Association (NPA) Rob Mutimer used an open letter to Tesco boss Ken Murphy to argue that the company was uniquely positioned, because of its scale, to prevent the demise of its UK pork supply base.

He claimed that Tesco, which has 27% of the UK market, was not paying enough for its pork supplies and that rivals had stepped up to help producers facing unprecedented losses due to soaring costs.

These were due, he said, to record pig feed prices as wheat costs surge amid the war in Ukraine.

It marked the latest crisis to hit the pork sector.

Sky News revealed in November last year, in the run up to Christmas, that vets were carrying out abortions on pigs as the supply chain struggled to recruit specialist abattoir workers and backlogs built up.

Mr Mutimer noted that it currently costs 203p to 216p per kg to produce a pig, but average pig prices remain below 170 pence a kg.

He said that meant many producers were losing tens of thousands of pounds each week though Sainsbury's, Asda, Morrisons, Aldi, the Co-op, Marks & Spencer and Waitrose were pulling their weight.

While the grocery sector has pledged to keep costs as low as possible for shoppers due to the wider cost of living crisis facing families, the NPA argued the future of the industry was at stake.

"Unless action is taken now and a fair price is paid, there will not be a domestic pig industry left to service the demands of your shoppers," Mr Mutimer told Mr Murphy.

Tesco, which reported annual profits above £2bn last month, warned at that time that it faced a battle to "keep the cost of the weekly shop in check".

The chain said in response to the open letter that it recognised the seriousness of the situation UK pig farmers were facing.

A spokesperson said: "Through the buying models we already have in place, our suppliers have increased payments to farmers by £3.4m since March 2022.

"However we would like to do more and are actively working with our suppliers on a further enhanced payment plan to support farmers in the short term."

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