New EU rules on pig welfare to help farmers

For the last decade EU pig farmers have been allowed to breed sows that are kept in stalls throughout their entire lives, whereas British pigs are free to roam and demonstrate normal behaviour.

But new EU rules have come in that will force European farmers to adopt the same higher welfare standards that the UK introduced 10 years ago.

Hull-based Cranswick’s chief executive Adam Couch said the changes will help equalise pig prices between the UK and the Continent. Until now EU pigs could be produced far more cheaply as UK farmers had to spend more on animal welfare.

Announcing record annual results, Mr Couch said that while the group would never hope to benefit from the horse meat scandal, it has been beneficial to pork sales.

“Pork hasn’t been in the limelight in the way beef has, but this scandal was not good news for the industry,” he said. “It raises question about the supply chain.”

Cranswick came out of the scandal unscathed after rigorous testing.

“Some 70 per cent of our pigs come from within a 50-mile radius of our fresh pork sites in Hull and Norfolk,” said Mr Couch.

The Hull fresh pork site now has the capacity to process 30,000 pigs a week and is supported by a second fresh pork site in Norfolk which is capable of processing 18,000 pigs a week.

“Both are of significant importance to the local farming communities in each region,” said Mr Couch.

He was speaking yesterday as the company reported an eight per cent increase in underlying pre-tax profits for the year to March 31 to £49.3m on the back of a seven per cent rise in revenues to £875m.

Underlying sales rose five per cent.

Mr Couch said the business has faced a number of challenges over the last 12 months, including the impact of high feed prices.

The high prices led to record pig prices, with the price peaking in December 2012 at 161p per kilogramme, a level it has stayed at.

Cranswick said it managed the upward pressure on pig prices, partly through the support of customers, but also through operational efficiencies thanks to the £125m investment in the business over the past five years.

This expenditure has included the development of a new pastry production unit on a greenfield site at Malton, North Yorkshire, which was commissioned earlier this month.

Mr Couch said the fresh pork business had a strong year with sales growing by five per cent. This growth was particularly strong between January and March thanks to two new contracts with Asda and Marks & Spencer.

The Hull and Norfolk operations are benefiting from approval to export meat to China and more recently to Australia.

Export sales now account for five per cent of group revenues.

“I’d like to double that to 10 per cent over the next three years,” said Mr Couch.

Cranswick ships 16 25-tonne containers to the Far East every week and shipment of premium cuts to Australia is imminent.

Sausage sales increased by 10 per cent over the year.

“This was a pleasing performance given the inclement summer weather in 2012,” said Mr Couch.

The Hull facility now has weekly capacity in excess of 700 tonnes and is capable of producing 11 million sausages a week.

Sales of premium hand cured, air-dried bacon rose by 13 per cent.

The bacon facility, at Sherburn-in-Elmet, near Leeds, has introduced the latest laser slicing technology to improve efficiencies.

Cooked meat sales rose by 11 per cent. Growth was supported by significant business wins during the final quarter.

The hand-cured, air-dried premium ham range has continued to gain market share.

The group added a 2,000 square metre extension to the Sutton Fields facility in Hull, which increased capacity by 50 per cent and was commissioned in advance of the peak Christmas trading period.

Sales of continental products fell seven per cent after Asda took the business in-house, while sandwich sales increased by seven per cent.