The UK meat market is facing a perfect storm that, unless government intervention is forthcoming, could lead to empty shelves, chronic price inflation and even company failure.
The “pingdemic”, whereby people are told by Test & Trace to isolate after contact with someone that has had a positive COVID-19 test, has decimated the workforce. Coupled with Brexit-related immigration curbs many staff from the EU have been removed from the processing lines. As a result, there has been a 20% reduction in the workforce which is leading to a sharp increase in wage inflation. The UK’s meat industry is having to simplify their product ranges and food shortages cannot be discounted as companies focus on high demand produce.
The same problems that are squeezing the meat sector are exerting pressure further down the supply chain. A serious tightening in road distribution capacity has worsened markedly in 2021, as EU based drivers avoid post-Brexit bureaucracy and UK-based drivers are increasingly self-isolating. An estimated 100,000 unfillable haulage roles in the UK show a key part of the supply chain is breaking down.
Growing choruses of protest are echoing across the meat industry, even from those that backed the UK’s leaving of the EU. Demands for exemptions for the meat industry from Test & Trace isolation requirements have so far gone unheeded. Calls for relaxation of immigration rules to ease staffing shortages in the slaughter, processing and distribution of meat are yet to be heard through the ideological fog of post-Brexit Britain.
Companies are warning that unless there is intervention from HM Government, there is a real risk that companies could be forced to halt production entirely. But how many of the UK’s leading meat companies will be able to ride out disruption that could be with us for quite some time?
Plimsoll, the UK’s leading analysts of company performance and financial trends, reveals the percentage of companies across key niches of the UK meat market that are already in financial difficulty and least able to cope with prolonged disruption:
| Industry |
% of companies rated Danger |
Sales per employee |
Salary % of sales |
| Sausage manufacturers |
39% |
£168,000 |
16% |
| Pork & bacon |
44% |
£331,000 |
9% |
| Poultry |
38% |
£272,000 |
12% |
| Halal meat |
38% |
£318,000 |
9% |
| Turkeys |
37% |
£160,000 |
15% |
| Abattoirs |
36% |
£299,000 |
9% |
| Catering butchers |
34% |
£178,000 |
15% |
| Retail butchers |
33% |
£147,000 |
16% |
| Meat wholesalers |
31% |
£306,000 |
8% |
| Meat processors |
26% |
£235,000 |
12% |
As the table above shows, salaries are already absorbing a high percentage of revenue among butchers, poultry firms and those processing meats, particularly sausages. Any additional increase in salary costs will expose many in those niche industries. With inflationary costs building throughout the slaughter, production, and distribution processes, rocketing supermarket prices, supply disruption and potential company closures cannot be ruled out.
Has the UK’s leaving the EU exposed the UK industry, is it down to the pandemic and how does the UK market compare to the EU? Plimsoll analyses markets across the EU and has produced a comparison table of performance across the continents largest meat processing sectors to determine whether the UK markets growing list of issues are Brexit related or common across the continent:
| Region |
% of companies rated Danger |
| European Union |
19% |
| United Kingdom |
36% |
The number of UK companies in financial danger is almost double that of their peers in key European markets. In the UK poultry market, for example, 39% of UK companies are rated as Danger by Plimsoll while paying over 12% of their turnover in salaries alone. This is compared to just 19% of companies with the same Danger rating in key European markets.
Plimsoll rates companies based on their financial stability and vulnerability to shocks. A rating of Danger does not necessarily indicate unavoidable failure for a business. It simply measures a company’s ability to withstand disruptions and prolonged adversity.
The disparity in financial stability between UK companies and their continental counterparts is prevalent across all parts of the meat sector. While shortages and disruption are hurting every business amid the pandemic, the problems appear to be exacerbated in the UK by Brexit and the additional red tape and burden it has placed on companies. As companies struggle to find staff to slaughter, pluck and prepare produce for the market, it is possible that consumer prices and corporate fragility could increase significantly in the coming months.
Whatever your market, Plimsoll can provide the analysis you need to ensure your business is financially prepared for shocks, getting the most from its investments and balancing commercial success with longevity. Knowing how your company is really performing, how you compare to others in your key markets and who is exposed, will be key knowledge heading into 2022.
To find out more about Plimsoll and our analytical platform, why not book a demo with one of our team today? Visit www.plimsoll.uk or call 01642 626400 to find out more.