Monday, 29 November 2010

EBLEX Levy Hike Needs to be Challenged

Good on Graham Dixon and his band of 30 Northumberland farmers for questioning EBLEX’s demand for an 18% increase in levy fees. A hike like this bears challenge even in boom times, much less when money is tight.

EBLEX which only covers England already has a big budget amounting to £13.5m, of which £12.7m comes from levy fees. This compares with a levy budget of £9.9m for Cereals and Oilseeds, which has a UK remit, and £6.8m for Dairyco which covers Great Britain.

The extra money raised amounts to £2m. £1.2m of this will be spent on promoting exports of beef, lamb, and the fifth quarter, and the rest on increasing domestic demand for beef and lamb. The current budget for export work is £2.4m, and the budget for domestic promotion is £4.5m.

Mounting a challenge is not easy, for it is difficult to pinpoint exactly who makes the decisions at EBLEX. There is a board, upon which sit a number of farmers and processors. The board seems to report to the AHDB board, and somewhere along the line DEFRA has a say. But if the decision makers could be found it would be helpful to get a view on the following issues.

1. Will not export performance be more a function of the strength of the Euro rather than anything EBLEX can do? If so, it seems odd that of the £2m extra raised by the new levy, £1.2m will go on export work.

2. With lamb consumption falling by 7% this year, and beef consumption just about static, what evidence is there that EBLEX marketing activities to date have made any difference at all to domestic consumption? It is not enough to cite awareness of promotional activities as evidence. Just knowing about something is not the same as being motivated to buy.

3. Given the substantial spend by retailers on advertising red meat on TV, in magazines and newspapers, promoting it on their websites with recipe ideas, and featuring it in store, where does EBLEX think it is adding value with its promotional spend?

4. If the increased funding does not come through, does EBLEX believe so firmly in the value of this new work that they are prepared to rejig budgets to carry it out?

The NFU is working to pull together responses from the industry about the proposed levy increase, and is right to request a business plan with clear and measurable targets. It should go further and insist upon a detailed analysis of effectiveness to date, to act as a basis for deciding whether an increase in the levy is justified, and to help judge whether the business plan is rooted in reality.

Thursday, 11 November 2010

Why the consumer is buying less lamb – insight from EBLEX shows it’s not just about price

This year consumers have bought 6% less lamb than last, and the decline seems to be speeding up. In the last 12 weeks consumers bought 11% less lamb than they did in the same period last year.

These are scary numbers and the pessimist might envisage a time not very far away when consumer demand for lamb is about half of its current level, with a similar fall in demand for livestock.

A recent EBLEX report gives clues about why lamb is out of favour, and what can be done to reverse the drop.

The 500 meat eating women interviewed each quarter by EBLEX say that the main reason they don’t buy lamb as much as other proteins like chicken, beef or pork is that lamb is too expensive.

So far so predictable many might think. But price is not the whole story. What makes people buy anything, even the very highest priced products, is their perception of whether the product in question is good value for money, and most cuts of lamb are seen as “not at all good”, or “not very good” value. The exception is lamb mince which is just about neutral – neither good nor bad.

All sorts of factors come into the value equation, and compared with other proteins lamb is rated worse on versatility, on ease of cooking, and especially on fat content. 57% of people say lamb “can be fatty” compared with 46% for pork, 28% for beef, and 5% for poultry.

Lamb falls down on other health aspects. Consumers feel that lamb is not as protein rich as beef, and do not realise it is as good a source of vitamins and minerals as beef.

The one positive point is that consumers view lamb as a tasty food.

So what should be done?

Lamb needs to be given an image makeover. EBLEX suggests that its versatility and health benefits need to be promoted. To this could be added using imagination to present unpopular cuts such as shoulder in a better way. One supermarket for example sells shoulder chops – butchered in a way that ensures they are just as tender as from the leg, but around half the price, and far less time consuming than cooking a roast.

Producers could focus even harder on reducing the number of over fat lambs sent into the food chain, and processors and producers together might find ways of ensuring that the product is consistently of high quality when it reaches the consumer, which is not always the case at the moment.

The EBLEX findings are important to all in the lamb supply chain. A strong home market forms the backbone of the sector, cushioning participants from the ups and downs of exports, and from the ebb and flow of lamb supply.It is critical to ensuring a consistently profitable future.