Scotland’s farming union has launched a bid to help broiler producers hit by slashed production at the 2 Sisters Coupar Angus factory and “uncertainty” thanks to the sale of its plant at Letham.
Last week, the food group laid the blame of “substantial losses” on an “oversupply of poultry” north of the Border, citing Scotland as historically its least efficient manufacturing base.
Breaking the news that it plans to cut the throughput of poultry at Coupar Angus from 750,000 birds a week to just 525,000 and potentially make around 200 of its 658 Perthshire workforce redundant in a bid to secure the future of its facilities, the firm also revealed it had found a buyer for its smaller chicken processing plant near Forfar.
With the future of both factories now posing a “major threat” to the Scottish poultry supply chain, NFU Scotland has issued a plea to the country’s major retailers, urging them to make a strong commitment to source more chicken from Scotland’s farmers.
The union also sought to trigger dialogue between its affected membership and key industry players including not just these major retailers but also 2 Sisters and the Scottish Government.
As a result, the NFUS is now staging a meeting where the doors will be thrown open to those affected by the food group’s announcement and the termination of supply contracts.
The meeting will take place on Monday (December 2) at Lochter Activity Centre, Oldmeldrum, Inverurie, starting at 4pm and concluding at around 5.45pm.
“The union has concerns that producers’ groups are in a position of uncertainty,” said NFUS president Nigel Miller.
He said that the “significant blow”, particularly in terms of the level of investment sunk into these businesses in recent years, can only undermine continued confidence in the sector.
“The termination of contracts and the reduced price per kg linked to any future supply can only erode both profitability and trust,” said Mr Miller.
While the 2 Sisters group said there is “evidence of a decline in the UK poultry market due to changes in consumer demand, which they say is unsustainable”, Mr Miller said there seems to be a disconnect between what retailers are saying and what the food group is saying.
“There is a clear commitment to Scottish product and a real expectation of growing demand,” said Mr Miller.
“We will be continuing to seek retailer input as to how shelf space for Scottish chicken can increase,” he added.
When the outcome of the first stage of 2 Sisters’ review of its plants broke last week, Courier Country growers called the news “galling”.
Mark Ogg, of Arnhall, Edzell, who is one of a group of broiler chicken producers told their contracts to supply birds to 2 Sisters would be torn up after the next two batches of birds have been produced, said he is being left “high and dry”.
Encouraged at the behest of two supermarket customers keen to boast of higher welfare standards, whom the processors have been supplying, he spent millions of pounds in recent years upgrading units to the highest criteria, he said.
“Now we are being cut loose with no other buyer in the market,” said Mr Ogg.
Making matters worse was the announcement that prices for the final two batches of chicken will be cut by around 5 ppk, to a point where growers believe it “hardly worthwhile” to fill the units.
Rural Affairs Secretary Richard Lochhead yesterday travelled to Finavon, in Forfar, to speak with broiler producers who similarly have contracts effectively cancelled from early next year.
These farmers now face the bitter prospect of chicken coming north from England and sitting on the supermarket shelves while Scotland’s production sheds lie empty.
“The Scottish Government stands ready to help these poultry producers in any way we can,” said Mr Lochhead, who added that Holyrood is backing the formation of a producers’ group.
He said the group, assisted by the Scottish Agricultural Organisation Society, will consider the other market opportunities available.
A separate working group involving the union, Scottish Government, Scottish Enterprise and representatives from the affected growers has also been set up to examine the future of Scotland’s poultry industry.
Tesco is currently the only major retailer committed to a 100% fresh Scottish supply, and the Government is known to be questioning Morrisons, Asda and Waitrose as to why they are not following its lead.
Mr Lochhead conceded the loss of so much poultry production is also expected to have an effect on ancillary businesses such as arable farmers and those in the feed and haulage industries.
A spokesman for 2 Sisters described the news as a “rescue plan for Scotland”.
Mr Miller, however, condemned it a “real blow” to the industry.