Pilgrim’s UK blamed ‘political tensions’ with China, after it announced its pork processing site at Ashton-under-Lyne has been forced to place around 100 employees from its abattoir section on a three-day week.
It has warned the future of the whole site is in jeopardy.
The site had been previously licensed to export products to China, but this was voluntarily suspended by the company in October due to a number of positive COVID-19 tests at the site.
The company received a clean bill of health from PHE and local health authorities in early December. But while the site was due to have its licence reinstated, this has been withheld while political tensions between the UK and China have escalated, it said.
Pilgrim’s said the delay in reinstating the licence has ‘significantly impacted the profitability of the site in Ashton, meaning that the current situation is financially unsustainable and could put at risk the site and its 600 employees’.
To ensure it remains commercially viable, the processor said it has therefore had no option but to reduce the number of operational hours per week within the Abattoir section of the site.
The abattoir is now only operating from Monday to Wednesday – with impacted employees placed on furlough for the remaining two days per week. A limited number of staff have been offered alternative roles within the butchery department where core skills are transferrable. The rest of the site team remains unaffected at this moment in time and all customer orders continue to be fulfilled.
A spokesperson for Pilgrim’s UK said: “While we do not take this action lightly, these measures are absolutely necessary in order to prevent redundancies and protect jobs. The delay in reinstating our export licence with China has had a significant impact on site profitability and without action the commercial viability of the site is under threat.
“We are working closely with the Government and relevant authorities to have the export licence with China reinstated without further delay, and once this is achieved, we will look to return to previous shift patterns.”
Cranswick’s Norfolk site and QPL’s Brechin plants are also facing long delays in regaining their export licences, following COVID-19 outbreaks, which is having a huge financial impact on the sector.
The British Meat Processors Association estimates that one million pig carcasses have been affected by the suspension.
BMPA chief executive Nick Allen told Pg World the loss of China sales is costing more than £15/pig, based on the difference between what the Chinese market pays and alternative outlets for the pork. With Cranswick’s Watton and Pilgrim’s Ashton sites typically killing around 40,000 pigs between them a week, it is costing the industry around £600,000 per week over a long period, he said.
A recent Financial Times article quoted an official at China’s General Customs administration, who said China would ‘lift the import curb when there is sufficient evidence that the pandemic is under full control in the UK’.
“There is no sign that has happened,” he said. “There is evidence that the virus could stay alive in low-temperature environments. We would rather overreact, than not reacting, when it comes to virus prevention.”
A Defra spokesperson said: “Although there are a small number of businesses that cannot currently export pork products to China, this issue is not unique to the UK. We recognise the challenges the sector is facing and are closely monitoring the situation.
“Defra will continue to support the affected establishments, working closely with UK industry and the British embassy in Beijing, with the aim of securing the resumption of exports.”
The BMPA is seeking a support package to compensate processors for the loss of the China market.
Separately, the NPA is seeking £3.2m to help them producers with the impact of overweight pigs caused by the backlog of pigs on farms due to a combination of factors, including COVID disruption in pork plants and Brexit delays at ports. This has cost them extra money in feed and penalties from processors for animals slaughtered at high weights.