Vion, the country’s second-largest poultry supplier, is considering pulling out of the organic chicken market as a result of a review of its operations begun in early summer.
The company said it was currently reviewing its ”organic supply base” in Scotland and planned to make a decision by the end of the year.
Organic poultry accounts for about 1.5% of the total poultry market and market conditions were “very challenging” at present, said a spokesman for the company.
“It’s not a foregone conclusion that we will come out of organic, but we are considering all options and have started talking to our suppliers,” he added.
Richard Griffiths, senior executive officer at the British Poultry Council, agreed trading conditions for organic poultry suppliers were tough at the moment.
“Since the beginning of the economic downturn, organic poultry has seen a steady decline from its peak at over 4% in 2009, and it is still dropping,” he said. “While the ethical aspirations of consumers haven’t changed, there are more affordable options in that marketplace, with free-range and higher welfare lines emerging as strong challengers to organic.”
NFU chief poultry adviser Kelly Watson said impending changes to EU regulations for organic feed rations were exacerbating a tough climate for producers. Organic poultry feed can currently contain up to 5% of non-organic raw material, but this is due to be cut to zero as of January 2012. In addition, there are proposals to require organic poultry producers to source large quantities of feed from their own holdings a difficult prospect for many British producers, who do not typically grow their own feed.
Griffiths, however, identified a silver lining in the form of the Christmas market for organic poultry, which is expected to run contrary to the downward trend in general organic poultry sales.
“Seasonal organic producers for turkey, goose and duck are confident consumers will splash out for a special occasion,” he said.
Vion targets £77m uplift from new pork campaign (21 May 2011)
Meat & Fish Supplement 2011 (21 May 2011)