• Farmers driven out of business
• UK pig sector faces destruction
• Retailer uniquely placed to help
Britain’s biggest retailer has increased payments to pig producers by £6.6m after being told it needed to it needs to do more to support struggling farmers – or wave goodbye to British pork.
It came after the National Pig Association said Tesco should pay a fair price for pork or risk losing its British pork supply base forever. A survey shows four in every five producers will go out of business within a year unless their financial situation improves.
In an open letter to Tesco chief executive Ken Murphy, NPA chairman and Norfolk pig producer Rob Mutimer said the retail giant was uniquely placed to help prevent the destruction of the UK pig sector.
UK pork producers are continuing to facing unprecedented losses as production costs soar due to record pig feed prices. Pig production currently costs 203-216p/kg but average pig prices remain below 170p/kg.
Production costs are forecast to rise even higher, as wheat prices continue to rise due to disruption caused by war in Ukraine. Yet average pig prices remain low – meaning many producers are losing tens of thousands pounds each week.
Tesco’s decision to increase payments follows similar decisions by the Co-op, M&S, Aldi, Asda, Morrisons, Sainsbury’s and Waitrose, who are also paying more for British pork through their dedicated supply chains.
Outlining how producers had been hit by an unprecedented crisis over the last 18 months, Mr Mutimer said: “Problems facing the sector have been building for some time and have arisen through no fault of the primary producers.”
NPA survey data suggests there are still 100,000 pigs stuck on farms that should have gone to slaughter and farmers are losing in excess of £50 per pig due to the enormous gap between their cost of production and the price the supply chain is paying for pork.
An estimated 10% of the breeding herd has already been lost as producers have left the industry or reduced production. Mr Mutimer said: “By 2023 British pork will be in such short supply that most retailers will no longer be able to source it.”
And he told Tesco: “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 and we know how much they value fresh British produce.”
Tesco said the additional £6.6m was on top of £3.4m it had already given the industry since March.
The retailer said it fully recognised the seriousness of the situation UK pig farmers were facing. It said it had been working closely with its suppliers to understand what more it could do to support the sector.
Tesco Fresh commercial director Dominic Morrey said: “We know there is more to do, and we will be working with suppliers, farmers and the wider industry to drive more transparency and sustainability across our supply chains and support the future of the British pig industry.
“We would like to do more and are actively working with our suppliers on a further enhanced payment plan.”