The future looks bleak for the UK’s poultry processors unless they can do more to reduce costs, add further value to differentiate themselves from cheap imports and get government to address the environmental costs of imports, claimed an independent supplier of cooked chicken.
Darren Gedge, technical director of Sunderland-based Challenger Foods, which supplies to the manufacturing and retail sectors, said competition from cheaper chicken imports at around £2/kg from low cost countries such as Thailand threatened the very existence of many UK-based companies, where costs of £4.5/kg were even higher than the EU average of £4/kg. “Five poultry companies have closed over the past 18 months because they were not competitive,” said Gedge.
Speaking at the Excellence in Food Manufacture 2006 conference on sustainable food production and consumption, Gedge said imports of chicken into the EU had risen by one third over the past two years. Of the 110,000t of cooked chicken imports into the EU in 2005, around 60% was imported into the UK, he added.
“You cannot compete in commodity products in terms of labour [costs],” he said. He called for urgent government action to address the high number of food miles generated by products from Thailand. Poultry from Thailand travelled 0.06 miles for each ton of chicken delivered at current tonnage import levels, he said, compared with 0.003/t for that produced in the UK. He added that when refrigeration during transport was considered, more energy was also consumed by such imports.
Gedge also complained that companies such as his own only received orders from some buyers when they had difficulties sourcing cheaper product from overseas. “As a supplier, on occasions, we do feel we are used,” he remarked.
In an attempt to reduce its own cost base, Challenger Foods was looking to install new cooking and rapid air flow refrigeration techniques to reduce its energy costs.