Sainsbury’s offers fixed price to pork farmers in £2.8m scheme

Sainsbury’s has announced an additional support payment of up to £2.8m for its pork development group – the supermarket’s farmer group which works to understand its farm base and increase visibility across the supplier chain.

The retailer has offered additional short-term support through a £2.8m investment for its pork producers, giving them the opportunity to align all pigs supplied to Sainsbury’s, including those not currently part of the model, to a fixed price for the 12-week period from 13/03/22 – 05/06/22

The supermarket created the pricing mechanism  based on robust and transparent data, that has paid above market price for fresh pork since September 2020, bringing its overall investment in its pricing mechanism to £5m.

“At Sainsbury’s we really value the relationships we have with our suppliers and believe that through support and collaboration we can uphold flexible, transparent supply chains that are able to navigate instability,” said Gavin Hodgson, Sainsbury’s head of agriculture, aquaculture and horticulture.

“The pork sector has seen unprecedented cost challenges and we hope that our further investment will provide our producers with security whilst maintaining high levels of animal health and welfare as well as product quality and great value for our customers.”

The move was welcomed by NPA chief executive Zoe Davies, who said it was ‘fantastic news for their pig producers’. She praised the efforts of Sainsbury’s and other retailers that are trying to get more money through to their producers, either by linking pig prices to cost of production or investing in the price via their processor.

But with average production costs well in excess of £2/kg and set to go higher as further feed ingredient prices feed through, she stressed that ‘some retailers still need to do an awful lot more’ to get producers back to and beyond break-even level.

“We understand why there is a focus in some retailers on trying to keep consumer prices down – but that must not be at the cost of the producers that supply their pork and are currently hanging on by a thread,” she said. “Retailers need to understand that if they lose their supply of British pork, they won’t get it back and their consumers will be missing out.”

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