Tesco has been criticised over its failure to support crisis-hit British pig farmers, as smaller rival Waitrose extended a £16m lifeline to help suppliers manage the jump in production costs caused by Russia’s war on Ukraine.
In an open letter to Tesco chief executive Ken Murphy, the National Pig Association (NPA) said the retailer risked losing its British supply base if it did not pay a “fair price” for its pork.
“Paying a little more today is likely to save you money in the long term,” said the NPA’s chair, Rob Mutimer, in the letter. “Unfortunately, we don’t have the luxury of time, and each week that passes puts pig farmers further into the red.”
Mutimer highlighted an industry poll that said four out of five producers would go out of business within a year unless their financial situation improved. The UK’s biggest retailer was uniquely positioned to act to prevent the “destruction of the UK pig sector”, he said.
“A relatively modest investment by Tesco will not only prevent the destruction of the sector, but it will mean that British pork will still be available at a price affordable to your customers,” added Mutimer, who pointed to the retailer’s recent doubling of annual profits to more than £2bn.
Pig farmers are quitting the industry after a disastrous 2021, when an export slump, combined with Covid disruption and Brexit-related shortages of abattoir workers, resulted in a cull of healthy pigs. Now they are dealing with soaring farm costs as disruption resulting from the invasion of Ukraine pushes up the cost of commodities such as wheat and soya.
The NPA said the industry had faced an unprecedented crisis over the past 18 months, with the price shock caused by the war turning a “very challenging financial situation to a critical one”.
Mutimer said there were still 100,000 pigs stuck on farms that should have gone to slaughter, with farmers losing in excess of £50 per pig due to the enormous gap between the cost of production and the price that retailers were willing to pay.
He added that 80% of pig farmers surveyed indicated that they would not survive the next 12 months if things did not improve, and estimated that by 2023 British pork will be in such short supply that most retailers will no longer be able to source it. “Tesco is in a unique position to help because of its UK market share and volume of pork sales,” he said.
As well as Waitrose, the NPA said rivals including the Co-op, Marks & Spencer, Aldi, Asda, Morrisons and Sainsbury’s were supporting their suppliers, with many paying more for British pork through their dedicated supply chains.
Waitrose said the £16m it was putting up would cover the full cost of rearing and producing pigs – including labour, feed, and fuel – across the 250 farms that supply the supermarket. James Bailey, its executive director, said the company was “offering our farmers financial security when others are being forced out of the sector”.
A Tesco spokesperson said: “We fully recognise the seriousness of the situation UK pig farmers are facing, and have been working closely with our suppliers to understand what more we can do to support the sector.
“Through the buying models we already have in place, our suppliers have increased payments to farmers by £3.4m since March 2022. However, we would like to do more and are actively working with our suppliers on a further enhanced payment plan to support farmers in the short term.”