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AHDB Pork Quarterly Category Report

01 June 2013

BPEX Quarterly Category Report - Review to June 2013BPEX Quarterly Category Report - Review to June 2013

BPEX Quarterly Category Report

DAPP to EU Specification

(DAPP = Deadweight Average Pig Price)

  • GB pig prices fell back after Christmas, as consumers tightened their belts, but have been rising from March onwards. Prices have been substantially higher this year and have reached new record levels. By late June, the DAPP was just over 168p per kg, around 7p above the previous high point recorded in the run-up to Christmas. The high prices have come despite pig meat production being similar to last year and relatively low EU prices. This suggests an increasing retailer preference for UK pork

  • Despite high pig prices, inflated costs mean that producers have remained in a loss-making position until recently. According to AHDB’s provisional estimates, the cost of pig production fell from 173p per kg in January to 164p in June. With cumulative losses since January 2011 totalling around £175 million, prices will need to stay high, relative to costs, for some time for the industry's finances to recover

Fresh Meat 52 Weeks to 9 June 2013

Source: KANTAR Worldpanel

  • Pork has seen reduced volume purchases over the past year with leg and shoulder roasting joints struggling, frying/grilling chops also down. Sales losses have been to lamb, chicken and chilled convenience/ready meals

  • Lamb’s strong performance stands out with volumes increasing 13.8% - this has been caused by the continued uplift in lamb leg (+37%). Heavy leg promotions drove lamb’s overall average price decline of 5.4% year-on-year.

  • EU pig prices were broadly stable in early 2013 as demand remained weak, both within the EU and on key export markets. The price level was generally higher than in previous years but briefly dropped below year earlier levels in May. Prices increased rapidly into June as better weather boosted demand and pig supplies tightened. By late June, they had reached their highest point of the year at €177. With EU prices rising more rapidly than UK ones, the gap between them closed from around 20p in mid-May to 13p in late June.

Category Inflation / Deflation

Annual Change in Retail Meat Prices and the All Items retail Price Index - June 2013

  • In June, the food retail price index rose by 3.8% compared to the previous year but was down by 0.5% compared to the previous month
  • Retail lamb prices in June fell over the 12-month period by 2.6% and by 1.2% on the previous month
  • Retail prices for pork were 6.2% higher over the 12-month period but 0.1% down on the previous month
  • Retail bacon prices were 7.2% higher over the 12-month period and up 0.5% on prices in May.

Retailer Overview

  • None of the top 4 retailers have seen above market growth for fresh pork, with two out of four actually recording declines in expenditure compared to last year. The top four account for 69% value share for fresh pork – down from 70.6% compared to last year
  • The hard discounters continue to increase their share within the grocery market. This has translated into increased shares across its pig meat categories
  • The top four multiples account for 66.8% of sausage sales, two of the top four retailers grew ahead of the market.
  • The hard discounters significantly overtrade in pork and bacon
  • All of the top four multiples overtrade in ham, while the hard discounters undertrade
  • Three of the top four multiples undertrade in sausages.

* MAT = Moving Annual Total. ** RST = Retailer Share Track.
A consolidation of data for all key commodity products, 237 markets in total.
Markets fall into five key trading sectors: Packaged Groceries, Fresh Foods, Toiletries, Healthcare, Alcohol.

August 2013

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