Retailers accused of failed promises over beef prices

PA Photo:  Chris Bacon.
PA Photo: Chris Bacon.
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retailers have been accused of failing to follow through on promises made in the wake of the horsemeat scandal as imports of cheap meat continue to severely undermine the price of British beef.

Despite early talk from retailers last year of shortening supply chains to avoid repeats of horse DNA being discovered in some products labelled as beef and reinforcing their commitment to sourcing British products, farmgate beef prices have tumbled in recent months as cheaper imports have flooded the market.

According to the National Farmers’ Union (NFU), farmgate beef prices are on average around £3.50/kg, back from £4/kg at the same point last year, with producers in the South seeing the lowest prices at below £3.30/kg. These are the lowest prices seen since 2012.

At the same time, rising retail prices have led to the producer share of the final retail price dropping from 59 per cent to 50 per cent in a year.

A beef industry summit, Beef Expo 2014, takes place at Hexham Auction Mart this week and Chris Mallon, director of the National Beef Association which organisers the event, is furious at how farmers are being treated: “British beef is a world class product that is the envy of the world yet it is being sidelined by an inferior product purely because it is cheaper.

“This is damaging the confidence we had in the sector last year which came after the promises made by retailers after horsegate to shorten supply chains and pursue provenance - we’ve been let down.

“The finishers have been losing money since November and the prices are still going down.

“The retailers’ support for the British label only goes as far as the cheapest product. They give great chat to us about their commitment and they sold us the story of expansion last year but if a Yorkshire farmer goes into the supermarket and sees all this cheap, imported beef they’re going to think that its a load of nonsense.”

NFU livestock board chairman Charles Sercombe added: “After horsegate, all we heard was that retailers wanted to build lasting relationships with farmers and we challenged them to prove it, but it seems that many of their processors have fallen at the first hurdle.

“British beef farmers need the trade to recognise that long-term cattle supplies are projected to remain tight and that short termism will come back to bite them.

“Although I recognise that some are working to reduce the volatility and put a base in the market, the rock bottom prices offered by others will make it even harder for processors in the future to secure beef supplies and will damage farmer confidence and undermine relationships across the chain. Processors and retailers need to live up to their promises, and to actively promote our product to British consumers.”

But Andrew Opie, director of food at the British Retail Consortium, said supermarkets offer “positive and strong support for British beef supporters”, with the vast majority of beef sold produced in this country. He said: “Figures over the last 10 years have shown how farmer margins have steadily increased and we see a very positive future for beef farmers in the UK.”