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.