Discount retailer Lidl has announced a new £500 million commitment to the British pork sector, including new pig contracts linked to cost of production.
As part of its new Lidl Pork Standard, the retailer has moved pork producers to an ‘open-book’ producer costing model that includes the on-farm cost of production, guarantees minimum producer volumes and includes a fixed margin for farmers.
This change was developed in collaboration with pork producers through its newly created ‘Lidl Pork Producer Group’, as the retailer recognises the need for a more sustainable pricing model within the pork sector for suppliers and farmers.
The new arrangements involve a partnership with two of the country’s biggest pork processors, Cranswick and Pilgrim’s UK and new approach to pork contracts, ahead of planned new Government regulation that will oversee contracts in the pork supply chain.
Through its new pork producer group, Lidl will also fund research and development projects aimed at mimicking the natural behaviours of pigs, such as rooting, sniffing and chewing, in turn improving their overall wellbeing. In a new trial, 3D cameras have been introduced to record the nature and frequency of the animals’ enrichment interactions, with the data being subsequently used to enhance welfare.
As part of the three-pronged approach and through collaborative efforts, Lidl is also investing in assessing the carbon footprint of all the farms in its pork producer group and subsequently putting plans in place to reduce these emissions. Alongside this, it will also be investing over £250,000 in at-risk GB catchments to support river health and water quality, while working to achieve deforestation-free soy sourcing by the end of 2025.
The retailer said this amounted to an investment of £500m to bolster the British pork industry, ensuring ‘the continued production of high-quality British product at the best possible prices for customers’.
It said this latest investment follows an injection of over £14 million into the industry in 2022 when the market price fell far below farmer cost of production, as it became one of the first retailers to react, increasing the price paid to farmers to ensure it was above market price on three separate occasions.
Lidl the fourth-largest retailer in the fresh pork category with an 11% market share, according to Kantar data. it said it was taking action to address recent sector-wide challenges, including rising costs, a Chinese import ban on EU pork and butcher shortages, which led to a significant backlog of healthy pigs and financial worries for producers.
Commitment
Richard Bourns, Chief Commercial Officer at Lidl GB, said: “This latest investment underlines our commitment to British producers, animal welfare and the environment.
“Acknowledging the challenges faced by the industry and its farmers in recent years, we recognised the need for intervention and the development of a bespoke solution addressing these challenges. That’s why we’ve been working closely with our suppliers and farmers, including major partners such as Cranswick and Pilgrim’s, to ensure we understand the intricacies of this supply chain and are well positioned to deliver impactful change.
“Our new pork standard is all about supporting our rural communities and ensuring the resilience of the sector while providing customers with high-quality British pork at affordable prices.”
Rick Buckle (pictured), Managing Director Farms – Pork Division at Cranswick Plc, said: “It’s great to see Lidl’s continued commitment to British pig farming and we’re thrilled to be working with them on its new standard. Together, we’ve already commenced groundbreaking research trials aimed at enhancing pig welfare and are excited to work in partnership with Lidl for years to come.”
Fábio Brancher, Operations Director for Agriculture at Pilgrim’s Europe, commented: “With Lidl’s support, this collaborative approach will provide crucial stability for our third-party farmers, shielding them from market volatility and aiding their recovery from recent challenges.
“This next step with Lidl underscores our commitment to supporting British farmers and fostering a sustainable future for the sector, and we look forward to developing our relationship further.”
NPA chief executive Lizzie Wilson added: “The NPA welcomes the introduction of Lidl’s pork producer contracts and its continued commitment to ensuring a sustainable domestic supply of British pork.”