1.2 The obstacles facing meat establishments

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Across Europe, meat establishments share similar obstacles:-

1.2.1 Economic

  • The weak EU economy had led to increased consumer focus on value for money and a change in shopper’s behaviour in their food shopping is challenging the meat supply chain to respond.
  • Meat remains a traditional category with low levels of innovation versus other fresh food sectors.(Bord Bia Ireland 2011). New flavours, tastes and religious preferences are shaping the meat options being sold.
  • Our recent SLMSC training needs analysis of meat establishments in the participating five counties (Spain, Ireland, Finland and Spain) shows that 39 % of the companies have experienced a decrease in the profit margins during the last two years, which most probably reflects the results of consumers’ behaviour during the financial crisis in Europe.1_2a
  •  Ireland (40 %) and Spain (75 %) have experienced the largest declines in profitability while on the other hand 50% of Finnish companies have reported increases in profit and is well over the average figure.

1.2.2 Increased cost base

  • A reason for decreasing profitability is also the increase in price on livestock and raw material, where in the same time the market has not allowed additional increase in sales prices.
  • High cost of managing wastes and animal by-products.
  • An inability to pass on fully the increases in cost base due to retailer market power, a highly competitive marketplace and consumer resistance to increased prices.
  • Regulatory costs associated with food and environmental safety

1.2.3 Low levels of Innovation

  • Meat remains a traditional category with low levels of innovation versus other fresh food sectors.(Bord Bia Ireland 2011). New flavours, tastes and religious preferences are shaping the meat options being sold.

1.2.4 Local infrastructure

  • In many cases, there is not enough local infrastructure  in many rural communities and agricultural economies as the number of small butcher shops and slaughter plants declined,
  • Limited access to capital and financing

1.2.5 Need for Training & Education

  • Need for training and education in the meat sector at vocational and business development level.   The cost of training is a high barrier for all countries, except Finland, who in general prioritize training
  •  Need for consumer education

1.2.6 The challenge of regulation

  • An EU- regulation, which has recently come into force, is an additional demand and barrier to food companies, who distribute beyond 50 km from their production place. They are obliged to have wholesale authorization, which in case of many small companies is an extra hurdle and cost for expansion of business to areas with more consumers.

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Disclaimer

LLP/LdV/TOI/2011/IRL-502 This project has been funded with support from the European Commission. The author is solely responsible for this publication (communication) and the Commission accepts no responsibility for any use may be made of the information contained therein.