UK poultry sector under-performing in EU market
British poultry businesses need greater market clout and a more international outlook to thrive, as Rhian Price reports
The UK poultry industry needs to become more efficient if it is to compete in a consolidating domestic market, according to analysts at Dutch bank, Rabobank.
In its recent report into the industry's future competitiveness, it says the current structure of the main integrators is ineffective when it comes to competing with powerful British supermarkets.
Furthermore, despite operating in one of the highest value-added markets in the EU, the British poultry industry has faced falling profit margins due to high feed prices, limited volume growth and oversupply.
On the demand side, Rabobank says the UK poultry market is close to its maximum absorption level, with no rise in per capita consumption. What growth there is stems from population expansion alone.
The report also says the industry has failed to capitalise on its strengthened market position, associated with the depreciation of sterling and new marketing standards, which prohibits the use of frozen poultry in fresh processed food products.
"The UK poultry industry is not well-known for having an efficient value chain, which is one reason why (foreign) exporters are still able to maintain market competitiveness despite the pound sterling depreciation," it explains.
And, while UK consumers are prepared to buy high-quality products at premium prices, many of these can also be outsourced to international suppliers for less money.
Rabobank therefore encourages further internationalisation into the growing north-western European market.
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