UK food companies are pressuring farmers into intensive meat production with lower welfare standards as a race to the bottom on prices opens the doors to a flood of imported cheaper products, a shocking new report from industry insiders claims today.
The accusations, by a group of more than 20 executives from major UK food companies, say the relentless drive to keep prices down has seen UK producers hindered from growing lower-impact, higher-welfare meat and meat alternatives. They claim public heath and the UK’s food security have been “deprioritised” as supermarkets go in pursuit of sales of “cheaper and more highly processed” meat and dairy products.
The report, entitled An Insiders’ Guide to Meat and Dairy, is the second major intervention from the group calling itself Inside Track, which The Grocer has independently verified includes a raft of senior business leaders from major UK food companies.
Food & drink businesses ‘woefully unprepared’
In April the group published its first “whistleblowing” memo which warned the UK food industry was heading for an economic disaster bigger than the pandemic.
It claimed food businesses were woefully unprepared for challenges including soil degradation, extreme weather events, global heating and water scarcity, and that yield, quality and predictability of food supply are all at severe risk. It added investors were being misled by retailers and manufacturers over the crucial risk from climate change and production practices to the food chain.
Th new memo, six months on, accuses UK companies of signing up to a series of commitments on meat and dairy production but then pushing a “growth at all costs” agenda of cheaper and processed meat and dairy, which will result in the industry failing its environmental targets and is a major risk to the future of UK farming.
It is, say the insiders, an endemic failure of governance that is widespread across the country’s biggest food companies.
Today’s document says the existing meat and dairy strategy of the country’s major food companies represents a major treat to food security, and on its current trajectory will lead to increased meat sales but with a larger proportion produced to lower welfare standards, and from processed meat.
The memo claims the practices are “a full-scale breach of our commitments around greenhouse gas emissions as well as land degradation, river pollution, biodiversity loss and increased pressure on land”.
“Companies are investing in commercial strategies in direct opposition to their environmental, health and welfare commitments,” it adds.
Meat margins are ‘unsustainable’
As well as attracting cheap imports, the insiders claim in the UK lower welfare standards have become “normalised” as retailers seek to drive footfall with cheaper prices.
“In many retailers, the margins on cheap meats are completely unsustainable but are used as a mechanism to drive footfall so that profit can be made on other items,” it says.
“One can argue that this means retailers are willing to invest to drive up consumption of cheap meat and dairy products, but not meat alternatives or low-impact, high-welfare meats.
“Similarly, category directors in meat and dairy are themselves incentivised and indeed tasked to grow their categories. Volume-based incentives are a standard part of industry compensation packages.”
The memo says it is a scandal that ‘conflicting plans’ within UK business pits commercial and health and environmental objectives against one another, and concludes that without a major change in direction both consumers and UK farmers will suffer.
It concludes: “[The current trajectory] will lead us to poorer environmental outcomes, poorer health outcomes, increased inequalities and more pressure on farmer livelihoods in the UK. It also creates material, financial risk for our industry and thus national food security. This is happening against a backdrop of a cost of living crisis, climate change and environmental degradation that means our operating environment will only get harder if we do not act now.”
Ned Younger, a director at Inside Track who co-ordinated the memo, said: “Food companies are striving for growth of meat and dairy sales at all costs. This will have a catastrophic impact as they breach their greenhouse gas emissions targets.
“Boards need to take accountability for a strategy that culminates in a major risk to food security. Farmers are being pushed into more intensive industrial production or being deserted in favour of cheaper, generally lower-welfare meat imports.
“It is an endemic failure of governance for companies across industry to undermine their own environmental objectives, health commitments and commitments to British farmers whilst creating risk to their business.”
EQ Investors head of sustainability Louisiana Salge added: “We have engaged on food manufacturers and retailers for many years in respect to their shared responsibility in public health, using research by ShareAction and ATNI. This paper, from senior professionals in the industry, shares another angle for us as investors to take seriously as it may affect the long-term value of such companies.”
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