Pork processors could be referred to the UK’s competition authorities if investigations into supply chain fairness uncover concerns about consolidation in the sector.
One of the big headlines from the pig crisis summit was Farming Minister Victoria Prentis announcement of an ‘immediate review of supply chain fairness in the pig sector’. “The effects of the pig industry crisis on pig farmers have been devastating, and it is clear that many contractual arrangements are simply unfair. Our Agriculture Act includes provisions to address this unfairness,” she said.
Responding to a recent parliamentary question from Shadow Farming Minister Daniel Zeichner on what circumstances Defra would refer a business in the pork supply chain to the Competition and Markets Authority, Mrs Prentis said the Government was ‘committed to tackling the unfairness that can exist in the agri-food supply chain’
“Powers in the Agriculture Act allow us to introduce statutory codes of conduct which increase the transparency of business relationships and protect farmers from imbalanced commercial terms,” she added.
“In the coming months we are launching a public consultation exploring how fairness and transparency can be improved in the pork sector. As part of this consultation process, we will gather evidence about market consolidation in the sector.
“If the consultation response indicates consolidation may be having an adverse effect on competition in the pork sector, these concerns could be raised with the Competition and Markets Authority.”
She said any regulations will be developed alongside industry with the close involvement of stakeholders. Some industry representatives have already held initial discussions with Defra officials involved in the inquiry, with a more formal industry consultation expected later this year, ahead of possible new legislation.
The weakness of contracts between producers and processors has been a source of immense frustration and anger among producers, as contracted pig numbers have been routinely cut since last summer, alongside a general sense of unfairness about how the burden of this crisis has been shared.
Stressing that the review will take time to yield results and that the immediate priority is the backlog, NPA chairman Rob Mutimer welcomed the review, which he said presented an ‘opportunity to forge more stable and fairer contractual relations across the supply chain’.