November 14, 2011


UK's Tulip Food plans to expand production capacity


Tulip Food Group plans to expand capacity which could provide a much-needed boost for domestic pig producers.


The company currently slaughters 2.5 million pigs a year, equivalent to 30% of the total UK kill, but investment at two of its sites could give it the capacity to process up to 40% of the UK herd, chief executive Steve Murrells told Farmers Weekly at Tuesday's (Nov 8) European Food and Farming Partnerships conference in London.


The focus of the expansion over the next three years will be on Tulip's Dalehead Foods division, which is dedicated to supplying Waitrose with UK pork. Production capacity at its Ashton plant is planned to be increased from 15,000 pigs a week to 23,000 by early next year, while its Spalding site is due to be expanded from a capacity of 13,500 to 25,000 pigs a week by later in 2012.


"At the moment we're looking to get the capacity in place before securing additional supplies, but I genuinely think there's a requirement for UK raw material more than ever and I can see retailers wanting more products from the home market," said Mr Murrells.


He and other speakers at the conference reckoned consumer demand for premium lines in supermarkets had held up well in the face of tighter spending.


This was good news for UK producers, as such product lines majored on higher welfare and provenance, he said.


"Premium products appear more able to ride the storm that's facing us, while other lower-end lines are being sucked into the market of people whose disposable income is getting less and less."


A similar view was shared by Martyn Jones of Morrisons, who said shoppers' buying habits had changed significantly since the recession, with people spending more time checking prices and managing their shopping budget. "But they still expect fresh, high-quality and welfare-friendly food and want to buy British," he said.


A survey by the supermarket revealed one-third of shoppers put more emphasis on buying British than they did five years ago, with 74% citing a desire to support the British farming industry as the reason, he said. Only 5% bought British because it was cheaper.


Fair-trade products had also fared well, Mike Gidney of the Fairtrade Foundation added. UK sales had risen from GBP836 million (US$1.3 billion) in 2009 to almost GBP1.2 billion (US$1.9 billion) last year and "double-digit" growth was predicted for 2011.

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