Tesco has been urged to “do more” to support struggling British pig farmers “or risk losing its British pork supply base forever”, by the National Pig Association.
The trade body has appealed directly to the retailer via an open letter to CEO Ken Murphy for Tesco to “pay a fair price for pork”, following a survey of its members that revealed four out of five could go bust within a year “unless their financial situation improves”.
UK pork producers were currently facing “unprecedented losses” as the costs of production soared due to record pig feed prices, the NPA said.
It currently cost an estimated 203-216p per kg to produce a pig, a figure forecast to rise even higher as wheat prices continued to rise due to disruption caused by the war in Ukraine.
“Yet average pig prices remain below 170p/kg, meaning many producers are losing tens of thousands pounds each week,” it pointed out, with farmers losing more than £50 per pig “due to the enormous gap between their cost of production and the price the supply chain is paying for pork”.
NPA data showed there were also still about 100,000 pigs backlogged on farms as a result of the sector’s shortage of butchers and due to China’s ban on European pork last year – which flooded the market with cheap meat – compounding the financial problems faced by producers.
The pig industry had already lost an estimated 10% of the breeding herd as producers had either left the industry or cut down on production, the organisation said.
So, given Tesco’s scale, it was “uniquely positioned to act to prevent the destruction of the UK pig sector”, said NPA chair Rob Mutimer.
Competitors including the Co-op, M&S, Aldi, Asda, Morrisons, Sainsbury’s and Waitrose – which announced up to £16m in further support to its pig producers on Thursday – were all paying more for British pork through their dedicated supply chains.
“But Tesco, the UK’s biggest retailer, which has just announced a trebling of profits to more than £2bn, is yet to respond to the crisis hurting its pig suppliers,” the NPA said.
“The problems facing the sector have been building for some time and have arisen through no fault of the primary producers,” read Mutimer’s letter to Murphy. “By 2023 British pork will be in such short supply that most retailers will no longer be able to source it,” he added.
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“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,” Mutimer wrote.
“A relatively modest investment” by Tesco would not only prevent “the destruction of the sector, but it will mean that British pork will still be available at a price affordable to your customers.”
Paying a little more today was likely “to save you money in the long term”, he pointed out. And the sector did not “have the luxury of time and each week that passes puts pig farmers further into the red”, he added.
“I fully appreciate that every part of the supply chain is under strain from inflationary pressures and your customers are struggling with the cost of living. However, I am sure that shoppers and shareholders alike would want you to back British farmers and ensure that we can supply you with fantastic pork for decades to come.”
The NPA said it was also urging its members to write to Tesco directly to make a similar plea, while copying in their local MP. “Tesco’s famous mantra is ‘Every Little Helps’ – well, pig farmers need a lot of help and if Tesco doesn’t step up to the plate, it is going to struggle to source British pork in the future,” he said.
In response, a Tesco spokesman said the retailer “fully recognise[d] the seriousness of the situation UK pig farmers are facing”, adding Tesco had been “working closely with our suppliers to understand what more we can do to support the sector”.
He added that through the buying models Tesco already had in place, its suppliers had increased payments to farmers by £3.4m since March, he suggested.
“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,” he added.
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