The head of one of the UK’s largest beef processors defended the prices being paid to farmers this year at a parliamentary committee meeting in Westminster on Wednesday.

ABP UK managing director Tom Kirwan said 2019 has been an “exceptionally difficult year” for the beef processor, which was driven by reduced consumer demand and an increase in cattle supply.

“We had a substantial change in consumer behaviour in summer 2019. We had a sales forecast and AHDB figures will tell you [there was] a 14-15% decrease in demand,” Kirwan said.

We are not convinced that the price in the shop fell by the same amount

He described the change in consumption as unprecedented and said the biggest switch in consumer buying habits was a move from beef to fish.

However, MPs questioned why lower farmgate prices were not reflected on supermarket shelves. “We are not convinced that the price in the shop fell by the same amount,” committee chair and Conservative MP Neil Parish said.

“The prices are reflected in the high street now,” said Kirwan. “There is a time lag because that’s the way we do business, we price either monthly or quarterly.”

Also giving evidence, Nick Allen from the British Meat Processors Association told MPs that UK retailers account for less than half of the market and beef prices are down across Europe.

“Some money has disappeared out of the supply chain because export values have dropped. More is being exported because the industry is trying to clear the stocks,” he said.

However, retailers still came under criticism during the evidence session, particularly for not promoting beef to consumers to help increase sales. “I saw virtually no promotions during the barbeque season this year,” said National Farmers’ Union (NFU) vice president Stuart Roberts.

Transparency

In his evidence to MPs, Roberts said that more transparency was needed in the entire supply chain, particularly in the foodservice sector and in export markets.

Establishing a statutory supply chain watchdog or extending the remit of the Groceries Code Adjudicator to cover farmers, was suggested by some MPs on the committee.

Tom Kirwan pointed out that ABP has already signed up to a voluntary code of practice and he said that the processor will work with any future statutory watchdog.

However, he signalled a note of caution on the idea, adding: “I wouldn’t want everyone to think that this will be a magic wand that will fix everything.”

Levies

MPs were also told that more needs to be done by levy bodies, such as AHDB, to promote beef domestically and abroad.

Stuart Roberts said that the UK government should match fund industry levies for promotional activities, and they should be more active in helping open new export markets.

The NFU vice president also used his evidence session to argue that the EUROP grading system needs reformed.

“We have a pricing mechanism in this country which incentives farmers to produce the perfect carcase for an intervention store. It is a disgrace that we are not rewarding farmers for what the consumer wants,” Roberts told MPs.