MISSION TO THE CZECH REPUBLIC Two photographs of the recent mission to the Czech Republic. A visit to a major food distribution company and the reception at the Embassy in Prague are featured here. 
BELGIUM Retail: § Colruyt is to offer the same guarantee for sliced cold meat as for fresh meats. Colruyt’s sliced cold meat, sold in Colruyt serve-over counters or pre-packed, will exclusively originate from their own meat production chain offering full control, traceability and certification. The new guarantee for sliced cold meat is certified by Quality Control, an independent quality assurance organisation. § News from the front of the price war between GB and Colruyt: The next few weeks will not be easy for Colruyt. In the past, supermarkets competed with each other with non-branded basic items. Now, GB is opening a new front in the market with an assortment of branded goods. Since Wednesday the 27th April until the 8th of Mai, the store chain is offering of “100% paid back” on 53 national branded lines, on which they can get their money back after they bought the goods. The customers must keep a little collection book where they have to write down the numbers under the barcode. Along with their receipt, they have to send their little book to GB. After 3 months max, the money will be deposit on the customers account. Colruyt has only 27 products of the free national brands in their assortment and they can impossibly go under the zero price, but giving the products for free as well show that they are loyal to their strategy of being the cheapest. Customers, who buy all 53 products, can get almost € 100 back. Last year, more than 140.000 people benefited from this promotion at a cost of more than € 7 million. “This promotion increases turnover by more than 20%, the free products are just a bait” says spokeswoman Geneviève Bruynseels. § Louis Delhaize (Cora, Match) continues with the expansion of its chain of “ready to heat, ready to cook and ready to eat” stores called Délitraiteur. The first concept store of 350 sqm opened in 1992 in Brussels (see below). There are now 19 stores in Belgium with a plan for 6 new stores in 2005. Chilled ready meals form the core of the offer with around 1,000 fresh food lines, 300 frozen food lines and around 1,500 dry goods lines. Stores generate half of their turnover between 18.00 and 22.00. 
Consumption: § According to retail executive Willem Grievink from Food Service Institute The Netherlands, private label will push erode national brands. Also, the supermarkets where the consumers shop are actually more important for the customers than the brands they buy. Another remark from Grievink is that consumers no longer intend to pay more for the marketing costs of national brands because there are almost no differences between Private Label and A-brands. Grievink also says that A-brands are allowed to be 15% more expensive than private labels, and not 35% like it used to be. GERMANY General Market News: § The six largest economic institutes have halved their growth estimates for Germany in 2005. They are now forecasting a growth of + 0.7 % in 2005 and + 1.5 % in 2006 after an estimation of + 1.65 % for 2005 last autumn. Actual 2004 growth was + 1.6 %. § A consumer attitude research for March 2005 showed that both entrepreneurs as well as consumers are again more sceptical with regard to the economic situation in Germany. Nevertheless, at the same time consumption has risen. Industry: § According to German Unions, some 26,000 Polish people have replaced German workers in meat plants. Polish workers work harder and are paid less than half of the wages of German workers (around € 5/hour against € 8-25/hour) and there is no minimum wage system in the meat sector. The large players D&S Meats and Danish Crown have been caught employing illegal workers. § The Westfleisch Group achieved an increased turnover of + 25.8 % in 2004 due to its merger with Barfuss. § Despite the high prices generated by organic beef, German organic beef production is relatively unprofitable. It must cope with high production costs as well as marketing issues, including poor sales. A study by the German Research Institute for Agriculture explored the potential for organic beef made in Germany by comparing the approaches French, British, Austrian and Swiss producers take. The study especially deals with aspects of marketing the products as the Institute feels there is much to learn from Germany’s neighbours. Retail and food service: § The French Intermarché Group has sold off its SPAR shares as well as 100 % of its shares of discounter chain Netto Schels to EDEKA AG, Germany’s largest food retailer. EDEKA has also acquired 25 % of the shares of Netto Stevenhagen,. Together with ITM and the Spanish Eroski, EDEKA has created a European wide buying alliance. § Edeka is planning to expand its product ranges in the regions. New store formats will be tested. Although a continuing centralisation was planned the regions are getting more and more power as they come up for most of the profit. § The K-Classic Premium private label brand of Kaufland (Schwarz Group) has only achieved an 11 % share of t/o since its launch in Autumn 2003. This is below expectations and has led to a loss of customers according too Gfk data. § Rewe is re-organising its re-call system for crisis situations. It is building a database, which will state the person to contact with every supplier in case a food crisis. The database will be accessible via a website for suppliers which Rewe will be launching in 2006. § Whitbread has sold its German steakhouse chain Maredo to venture capitalists for an estimated € 35-36 m. The chain has 54 outlets in Germany and attracted 7.6 m steak fans last year. It is number one in the category with a market share of 30 % ahead of Block House. Last year, the turnover of this profitable company was € 90 m. This was helped by the closing of unprofitable restaurants and by the sale of Costa coffee shops to Stockheim and Starbucks. § The CMA has published data regarding the predominant sales channels for meat for the first half of 2004: | Cash & Carry | è | 28.1 % | | Hypermarkets | î | 15.1 % | | Supermarkets | è | 15.0 % | | Discounter | ì | 15.3 % | | Butcher Shops | î | 19.7 % | | Other | î | 6.9 % | Consumption: § Consumption figures for the 1997, 2000 and 2003 are given
below.
Consumption: § Consumption figures for the 1997, 2000 and 2003 are given below. 
HUNGARY
§
Imre Nemeth, the Agriculture Minister has been sacked by
the Prime Minister Ferenc Gyurcsany, following the poor handling of the farming
crisis (see bulletins passim). The new Minister is a
safe hand from the Socialist party, Jozsef Graf.
IRELAND
§
Protest by sheep farmers have perturbed Irish lamb supplies
last week. Farmers blockaded lamb abattoirs in protest to the sharp drop in
prices of spring lambs and hoggets. All major plants were affected (Kepak
Athleague, ICM Camolin, Kepak Hacketstown, ICM Navan, Dawn Ballyhaunis and
Kildare). Supplies of cattle were also halted. The Irish Farmers’
Association Sheep Committee chairman, Laurence Fallon is accusing abattoirs of
profiteering. Analysts are blaming imports from Britain to Northern Ireland
pushing Northern Irish lamb to the Republic, thus destabilising prices. An
unexpected large supply of hoggets and a later switch to spring lamb by major
retailers have also been blamed. Poor skin demand and prices are another factor
dragging prices down. Production in Ireland this year may be down 9-15%, as a
high number of ewes are now being culled and the high hogget kill may limit the
number of ewe replacements.
§
Doom is compounded by a fall in milk prices. Some 1,500
farmers demonstrated outside Glanbia headquarters in Kilkenny.
§
The Irish Farmers’ Journal
published a fascinating analysis of cattle grades in the Republic (see
below).
Selected grading of Irish
cattle in various meat plants (%)
|
|
U |
R |
O |
P |
|
(Steers) |
|
All plants |
7.4 |
46.3 |
39.2 |
5.6 |
|
Slaney Meats |
6.5 |
66.0 |
24.8 |
2.1 |
|
Liffey Meats |
9.1 |
58.4 |
23.3 |
7.1 |
|
Dawn Ballyhaunis |
13.4 |
57.5 |
24.6 |
3.0 |
|
Kepak Athleague |
13.3 |
55.7 |
25.8 |
3.6 |
|
Dawn Ballaghadereen |
22.7 |
55.2 |
17.8 |
3.5 |
|
Donegal Meats |
27.0 |
56.8 |
14.2 |
1.5 |
|
AIBP Waterford |
0.8 |
32.5 |
57.7 |
6.5 |
|
Dawn Charleville |
2.2 |
31.5 |
56.5 |
8.0 |
|
(Heifers) |
|
Donegal Meats |
29.7 |
59.1 |
N/A |
N/A |
|
Dawn Ballaghadereen |
16.7 |
67.8 |
N/A |
N/A |
|
Kepak Athleague |
13.5 |
67.7 |
N/A |
N/A |
|
Liffey Meats |
12.6 |
62.7 |
N/A |
N/A |
|
Slaney Meats |
7.1 |
67.5 |
N/A |
N/A |
|
Dawn Charleville |
1.8 |
31.5 |
N/A |
N/A |
|
Ashbourne Roscrea |
4.1 |
25.0 |
N/A |
N/A |
|
(Cows) |
|
Donegal Meats |
- |
55.4 |
27.9 |
3.3 |
|
Kepak Athleague |
- |
28.5 |
50.7 |
17.7 |
|
Dawn Ballyhaunis |
- |
23.4 |
54.9 |
19.8 |
|
AIBP Waterford |
- |
5.1 |
48.6 |
43.6 |
|
Ashbourne Meats Roscrea |
- |
3.7 |
33.3 |
61.2 |
|
Dawn Grannagh |
- |
3.1 |
43.4 |
53.4 |
|
Dawn Charleville |
- |
3.0 |
47.4 |
49.3 |
§
There are huge differences between plants and clear buying policies. AIBP Cahir, Brandon and
Waterford, Dawn Charleville, Grannagh and Middleton, Ashbourne Roscrea, DND
Middleton and Kepak Watergrasshill have a clear focus on cheaper cattle. Donegal
Meats, Dawn Ballyhaunis, Ballaghadereen and Rathdowney, AIBP Clones, Kepak
Athleague and Cloney have a strong focus on quality cattle. Liffey, Slaney and
Exel privilege consistent ‘R’ steers.
§
These results show little evolution in the quality and type
of cattle in Ireland, which remains lower than the
UK average. The split between the beef-dominated North and the dairy-led
South remains strong. Heifers have generally a better conformation than steers,
as more originate from the suckler herd.
ITALY
Industry and politics:
§
Berlusconi's troubles have not ended with the successful
formation of his second government. The Milan magistrates have indicted him and
Confalonieri for a number of allegations regarding fraud and large-scale tax
evasion. The documents were lodged with the courts during Mr. Berlusconi's
attempts to form his government and name a "meat trader in Monte Carlo" as being
one of the conduits for funds skimmed off the purchase of mainly USA TV
programmes for his Mediaset channels.
§
Inalca and Montana have agreed a €100m loan with a string
of Italian banks. This is reported to have improved the group’s debt situation,
following some good results last year. The loans are for 10 years and are
repayable in 18 half yearly rates, the first falling due on 25 September
2006.
Consumption:
§
The mighty COOP retail organisation has just published the
results of some market research, it commissioned on Italian attitudes towards
GMO food. The results are not surprising, but do confirm the idea that there is
a lot of suspicion out there. Some 62.5% of consumers are not prepared to
purchase GMO, while 71.3% state that there is not enough knowledge of their
effects. In fact 45.6% claim that they are being kept in the dark. COOP has
launched its own brand of GMO free beef and claims to be surging ahead with
sales, though no precise figures have been published. The beef is born in
France, raised in Italy and slaughtered and cut in Italy.
§
The EU and Italian government do not recognise the decision
taken by many regions to ban GMO foods. This particular spat will run and
run.
§
Beef consumption has increased by 3%. The Nielsen figures are quite clear
in signalling a long-term positive trend and producer organisations claim that
this is due to returning trust. The many measures brought in to safeguard
consumers have been recognised as effective. A parallel trend is the increasing
consumption of beef from specialist breeds, such as Chianina, Podolica and
Marchegiana.
§
The fact that consumption is languishing is not only due to
the introduction of the Euro. The retail association has published a report that
blames the hike in the cost of services. Water, gas and electricity etc now
account for 45% of the family budget, while voluntary purchases have dropped to
24% from 35%. Many observers comment that the consumers have been overcome by a
conviction that everything costs twice as much. This borders on a
collective psychosis. To counter many claims of foul play the UNC, one of the
major consumer groups, has opened a website where it is possible to confront
prices.
§
An interesting article has been published in Agrisole, the
leading farmers weekly. It follows the growth in the production of beef
animals of the so-called 5 breeds (races in Italian). The number of animals
being raised at any one time has increased by 40% compared to pre BSE Italy in
2001. The growing popularity of the breeds, such as Chianina and Marchegiana is
in part due to the very BSE crisis. The reaction of the Italian consumer was
to move upmarket, consuming he higher quality product with the idea of
reducing risks, a move very similar to their reactions to the Methanol in wine
scandal of the mid eighties, avoiding the cheaper options on the market. This is
confirmed by any visits to any number of trattorie or pizzerie throughout Italy.
Most menus will proudly claim that their beef is of a specific breed or race.
Breeds also provide a reassurance per se regarding
the origin and quality of the beef.
§
Schuitema is researching new retail formats. In secret, Schuitema is
working on a new generation C1000 stores. The first drawings of the new stores
have been completed. This new store has 1500 sqm floor area. The tests with the
price aggressive store formula has showed disappointing results.
This report has been compiled on behalf of the English Beef
and Lamb Executive by the Meat and Livestock Commission, Export Marketing
department.
For further information on this report, please contact Jean-Pierre
Garnier on 01908 844 368, or at jean-pierre_garnier@mlc.org.uk
|
