1 EXECUTIVE SUMMARY
Introduction
1.1 The information presented in this report was gathered from a number of sources. Firstly reviews were made of other reports and information on the Scottish, UK and wider pig supply trade and secondly interviews (either face-to-face, telephone or by correspondence) with some key players in all sectors of the industry.
1.2 Following on from one of the recommendations in the Pig Sector Task Force Report, The Scottish Government Rural and Environment Research and Analysis Directorate ( RERAD) wished to investigate pig meat labelling in Scotland by:
- Reviewing statutory controls on labelling of pig meat and pig meat products
- Understanding current industry practice throughout the supply chain, particularly in respect of traceability and country of origin labelling
- Reviewing analytical methods to establish provenance and to support claims
- Reviewing consumer awareness of labelling and interest in welfare standards
- Considering the need for changes in labelling.
1.3 Over the past 10 years the size of the Scottish breeding herd has declined by 50%. Figures taken from the June 2008 census confirm that the trend reported in previous reports has accelerated with a further 8.2% decline in the breeding herd from 2007 to 2008, giving a figure of 36,890
1.4 About 85% of Scottish pigs are slaughtered through a single abattoir, with two further abattoirs processing a further 6.5%. The pig meat supply chain is significantly different from beef and sheep meat sectors. Three-quarters of the pig meat leaving Scottish primary processors is sold into the UK market outside Scotland. Additionally in 2007 for more than two-thirds of pig meat, the first point of delivery from pig primary processors was to food processors, with multiple retailers being the next main destination, which is markedly different from beef and sheep meat.
1.5 It has not been possible to obtain accurate figures for the volume or value of imported meat to Scotland as records are only made for UK imports. It is known that several of the abattoirs and cutting plants in Scotland are processing meat imported from England, Ireland and other parts of the EU.
1.6 Pork consumption in Scotland differs from that south of the border where it is predominantly eaten as a weekend meal. In Scotland, with 61% of its share expenditure on chops and steaks, pork is often eaten mid-week.
1.7 QMS indicate that 59,100 tonnes of pork meat were produced in Scottish abattoirs in 2007. It is estimated that 27% (16,000 tonnes) was consumed in Scotland with 43,000 tonnes (~73%) exported out of Scotland. To meet Scottish requirements QMS has estimated that 70,000 tonnes of pork meat is required, leaving 54,000 tonnes to come from external sources, of which 20,000 tonnes is imported from England. It has been estimated that approximately 50% of this "English" origin is actually Scottish meat returning in a processed form.
Statutory controls on labelling
1.8 The labelling of fresh and frozen meat is covered by a plethora of food law designed to ensure the consumer is not misled. Additionally EU competition laws require that national legislation is not worded so as to favour its own State over others to allow for competition.
1.9 Use of the terms Scotch Beef and Scotch Lamb are defined by EU regulations governing the definition of Protected Geographical Indication ( PGI). 'Specially Selected Pork' is the QMS scheme for pork and it is estimated that 99% of pigs are raised on farms compliant with this assurance scheme, but this standard does not have the same PGI status as Scotch Beef and Scotch Lamb. The 'Specially Selected Pork' scheme does set stringent standards for production (including for animal welfare) and the standards include the requirement that pigs have to been born, bred and slaughtered in Scotland.
1.10 In order to try to clarify the rules on labelling the Food Standards Agency has produced guidance on Country of Origin Labelling. The stated aims in producing this advice are to help:
- Manufacturers, producers, retailers and caterers to comply with the law and avoid misleading labelling;
- Enforcement authorities to identify and act on misleading origin labelling; and
- Consumers through the provision of more consistent, informative and transparent labelling practices.
1.11 There is no statutory definition of "place of origin or provenance" in the Food Labelling Regulations 1996 or of "origin or provenance" in EC Directive 2000/13/ EC. But both in Codex and the World Trade Organisation Rules, the country of origin is deemed to be the place of "last substantial change of the food".
1.12 Guidance from the Food Standards Agency states that:
- "we recommend that manufacturers provide [place of origin] information for primary products, particularly meat"
- "we recommend that [for] origin labels for meat:
- Single country origin declarations should only be given where animals have been born, reared and slaughtered in the same country
- Otherwise information on each of the countries of birth, rearing and slaughter should be given".
1.13 There is no legal definition of Scottish in regard to how it is used to label foodstuffs but guidance from the Scottish Government on the labelling of beef states that:
'If the term Scottish is to be used [in the labelling of beef] the animal must have been born, reared and slaughtered in Scotland.'
1.14 In January 2008 the European Commission issued a proposal for a new food information regulation. The proposal aims to update and simplify food labelling legislation by bringing together into a single regulation rules on general and nutritional labelling as well as some other horizontal texts covering additional labelling requirements. There is no extension of mandatory country of origin labelling in the new proposal. However should the country of origin be given voluntarily the rules surrounding the declaration will be tightened.
Industry Practice
1.15 A strong message that came from interviews with key stakeholders was that one of the major factors that affected the viability of the Scottish pig market was one of 'Carcass balance' - i.e. there was a need to ensure that all parts of the pig carcass could be used profitably rather than just prime cuts. It was emphasised that the UK market was significantly different from those in other parts of Europe where there was a much bigger consumption of cheaper cuts of pork and more variety in pig meat used in other products, e.g. a wide range of sausages.
1.16 Another strong barrier is higher cost of production in Scotland/ UK compared with other parts of Europe. The Farm Animal Welfare Council quoted an estimate indicating the production costs to be 12% higher than the EU average (and 60% higher than in North and South American exporting countries) due to extra costs, e.g. the greater use of straw bedding, extra veterinary inspections and cost of membership of an assurance scheme.
1.17 The main drivers of labelling requirements are the multiple retailers as 69% of the volume of fresh pork is sold through the biggest 4 retailers.
1.18 Representatives of the multiple retailers and food service companies interviewed all indicated that they were basically in favour of more local sourcing and would try to respond to customer demand - if there was more demand for pork and pigmeat of Scottish origin then they would try to meet that demand. However that demand has not been seen.
1.19 Multiple retailers have greater power in influencing labelling policy because of their more dominant market position. However concern was expressed about the size of the Scottish market compared with the total UK and the cost of setting up a dedicated supply chain.
1.20 Some food service companies have more flexibility as are more locally based to their customers and there were some examples of local promotions of Scottish pork - however there is concern about continuity of supply and the need to change labels/menus to ensure they comply with labelling regulations. Large public procurement food service companies feel more tightly bound by EU rules which restrict their ability to specify Scottish products.
1.21 There would be some increased costs in both retail and food service sectors if more Scottish pork and pigmeat products was specified - because of higher cost of Scottish pork, and particularly bacon, compared to some imports and also the need to change labels, although this would be a short term cost.
1.22 Traceability through the retail chain is more robust than through most parts of the food service sector because of the initiatives led by the British Retail Consortium, set in place because of the need to demonstrate Due Diligence, initially introduced by the Food Safety Act 1990. However major players in the food service sector now operate to similar standards.
1.23 Multiple retailers believe that consumers are becoming confused by the plethora of labels on food.
1.24 The Quality Meat Scotland marketing/promotion budget for pigmeat was £300,000 in 2007, compared with £3.55m for BPEX, £12.5m for Denmark and £3.75m for the Netherlands.
Analytical Tools to Establish Provenance
1.25 DNA-based probes have been developed for various meat species and are in use commercially for high value beef products. The technology exists to extend this to pork and pigmeat products but the commercial pressure is not yet sufficient to create demand in the UK.
Consumer Awareness
1.26 From a literature search few references were found that reliably indicate that Scottish consumers are particularly concerned about labelling and welfare standards associated with Scottish products. However there was some research that indicated that 75% of Scottish respondents were proud of higher welfare standards in the UK compared with the rest of Europe and also that awareness of welfare issues amongst Scottish consumers was increasing.
1.27 A Consumer Focus report indicates that Scottish consumers are confused by the wide variety of labels used to describe products made in Scotland.
Conclusions
1.28 Increased sales of Scottish pork and pigmeat products will not happen unless the consumer is convinced of the benefits of consuming Scottish products.
1.29 The main barrier to increased consumption is the higher cost of pig meat - primarily because of higher costs of production in Scotland and the rest of UK compared with other parts of Europe - although in some instances it may be availability, for example bacon. Extra costs may be generated in the pig supply chain from greater label control and possible segregation in processing of Scottish pigmeat. The lack of 'carcass balance' also means that parts of the pig cannot be profitably sold at present.
1.30 About 99% of Scottish pigs are produced under the Specially Selected Pork scheme which ensures that welfare and quality standards are maintained. The very recent (December 2008) incident of dioxins in Irish pork has highlighted the importance of traceability and provenance to the pig supply chain.
1.31 There is probably sufficient processing capacity within Scotland to supply potential demand. However the dominance of the leading company, which slaughters about 85% of Scottish pigs, leads to a geographical and cost imbalance in the market which means that some pigs are moved to England to be slaughtered, and so are 'lost' from the Scottish market.
1.32 The current labelling regime is fragmented and in some cases confusing to the public. A variety of labels/promotions are used to apparently denote provenance, such as the Saltire or tartan packaging, yet the pork in the packs may not be of Scottish origin. This is potentially misleading, even though it may not be strictly illegal.
1.33 Awareness of Scottish consumers of higher welfare and quality standards is not really understood so further market research is necessary.
Recommendations
1.34 The Scottish Government should invite the Food Standards Agency Scotland ( FSAS) to produce guidance on the labelling of pork and pig meat products as "Scottish" and in doing so encourage processors to disclose the origin of the main constituent(s) of the product. This is particularly important where imported product is being processed in Scotland or the rest of the UK and then labelled as Product of Scotland/ UK. The FSAS should also encourage all parts of the pork supply chain to follow FSA Guidance on labelling regarding Country of Origin.
1.35 The Scottish Government, the FSAS and QMS should consider co-hosting a seminar for retailers and food service industry to promote best practice for labelling of Scottish meat, including pork. This could include featuring some smaller, local producers.
1.36 The Scottish Government should discuss with FSA Scotland how more local authority resources can be made available to carry out more thorough checks on potentially misleading labelling of pork and pig meat products, such as use of Saltire on products which are not of Scottish origin.
1.37 The Scottish Government should fund a Scottish consumer survey to specifically measure awareness of Scottish consumers to higher welfare and quality standards in Scotland than in other parts of EU.
1.38 The Scottish Government should investigate sources of alternative funding that could be made available to Quality Meat Scotland ( QMS) to ensure it has sufficient funds to carry out longer promotions of pork and pigmeat products.
1.39 The Scottish Government should consider encouraging Quality Meat Scotland to carry out further promotions on the use of cheaper cuts of pork such as cheek, brawn, pork belly strips/roast for slow cooking, and consider new product development for speciality sausages. Campaigns should be piloted, for example in a few schools, before wider promotions to ensure the marketing budget is used to best effect.
1.40 The Scottish Government should consider encouraging QMS to produce a video clip for in-store/canteen display to show the benefits of keeping pigs in higher welfare standards. One major retailer has successfully trialled video footage of the various chicken production systems at point of sale to further inform the consumer before they make their choice. As a result, sales of free range chicken dramatically rose. The same approach could be used for Scottish outdoor pig keeping systems, followed up by footage of growing pigs in straw yards.
1.41 The Scottish Government (together with FSAS) should investigate the cost to the Scottish pork supply chain of the recent recall of Irish pork and use this to indicate the benefits of having country of origin labelling and a fully traceable system such as Specially Selected Pork.
1.42 The Scottish Government should consider how to make best use of the Food Processing, Marketing & Co-operation Scheme to support the costs of investment in new facilities for the processing of Scottish pork and the costs of developing stronger collaboration throughout the pork production, processing and marketing chain.