Pressure on UK beef supply chain
Published:  14 May, 2010

The UK supply chain for beef is being put at crisis point by retailer deals on mince.

UK processors have stopped taking carcases while large super-markets are unable to sell through roasting joints, making it likely that more beef will be imported to meet the demand for mince.

In the year to 14 June, roasting beef fell by 5% in volume, while mince increased by 1.2%, according to Kantar Worldpanel, creating a carcase imbalance. But the ability for mince to absorb price rises or its elasticity is high.

A projected 5% increase would lead to no drop in volumes, according to a new Eblex pricing model. A jump in roasting beef price by the same amount creates a 3.4% drop in volumes sold. This would result in a loss of 1% volume for beef overall, but a £28m gain over the course of 52 weeks.

"The whole system is unbalanced when mince is used as a footfall-driver," said Eblex market insight manager Richard Cullen.

"We should be looking at the health of the whole supply chain, and the tool we have helped to develop shows what pricing changes on different cuts will do to volumes." The Eblex pricing model is available for access on request.

>>Mince Report: A matter of mince

>>NBA urges multi-tiered approach to mince