The price of meat in supermarkets could rise if processor Grampian Country Food Group succeeds in persuading supermarkets to pay more for its products.
The Grampian sales force has begun negotiating with the multiples in a bid to win a 6% increase in the amount they pay for beef, chicken, lamb and pork.
Staff have met retail executives to explain how rising feed, energy and packaging costs are wiping out farmers’ and processors’ margins.
Grampian claims that higher gas and electricity bills are making the heating of poultry sheds unsustainably expensive. Prices have risen by up to 47% in the past year. Rising feed costs are also hitting producers hard.
Meanwhile, fuel price hikes are starting to bite, impacting on haulage of livestock and finished product.
The rising cost of oil is also pushing up packaging costs.
Philip Wilkinson, MD of Grampian’s chicken business, said: “We are looking for a 6% increase on packaged product, built up of 3% fuel price increases, 2% feed increases and 1% packaging increases.”
Grampian is taking care not to demand an increase in the retail price of meat, a strategy that would mirror that of the dairy industry over the past few months.
Wilkinson said: “We’re mindful of the fact that we don’t want to lose volume, and we know that price point is critical.
“But if you asked me whether I believed chicken was good value, then the answer would be yes. Do I think it is sometimes sold too cheaply? Yes I do. Do I think consumers would be prepared to pay a little more? Yes I do.”
Grampian has pledged that up to a third of any increase it wins from its retail customers - which include Tesco, Asda, Sainsbury, Morrisons and Somerfield - will be passed back to farmers.
Richard Clarke
The Grampian sales force has begun negotiating with the multiples in a bid to win a 6% increase in the amount they pay for beef, chicken, lamb and pork.
Staff have met retail executives to explain how rising feed, energy and packaging costs are wiping out farmers’ and processors’ margins.
Grampian claims that higher gas and electricity bills are making the heating of poultry sheds unsustainably expensive. Prices have risen by up to 47% in the past year. Rising feed costs are also hitting producers hard.
Meanwhile, fuel price hikes are starting to bite, impacting on haulage of livestock and finished product.
The rising cost of oil is also pushing up packaging costs.
Philip Wilkinson, MD of Grampian’s chicken business, said: “We are looking for a 6% increase on packaged product, built up of 3% fuel price increases, 2% feed increases and 1% packaging increases.”
Grampian is taking care not to demand an increase in the retail price of meat, a strategy that would mirror that of the dairy industry over the past few months.
Wilkinson said: “We’re mindful of the fact that we don’t want to lose volume, and we know that price point is critical.
“But if you asked me whether I believed chicken was good value, then the answer would be yes. Do I think it is sometimes sold too cheaply? Yes I do. Do I think consumers would be prepared to pay a little more? Yes I do.”
Grampian has pledged that up to a third of any increase it wins from its retail customers - which include Tesco, Asda, Sainsbury, Morrisons and Somerfield - will be passed back to farmers.
Richard Clarke
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