Scotland’s red meat promotional body, Quality Meat Scotland (QMS), last year posted an operating loss of £182,108 on their £7.1 million turnover but chief executive Uel Morton said this was a “planned loss” as a result of a board decision to reduce the general reserves of the organisation.
“We are here to do work on behalf of the industry, not to hold reserves of cash,” he said at the publication of the annual review of the organisation, which last year invested more cash than ever in promotion and research and development.
Most of the planned loss related to the integrated meat eating quality (Imeq) project, a three-year high-tech investment aimed at further enhancing Scotland’s reputation for producing top quality meat. The commitment from QMS to the Imeq project is some £489,000.
The same project will also produce a planned loss of £155,000 in the financial year to next March, but Morton claimed this would not only prove to be a good long-term investment for the industry but would also reduce reserves to a strategic £1m.
The problem for QMS in their forecasts is knowing just how the closure of Vion’s Bathgate plant will impact on the Scottish pig industry. Currently some £720,000 is collected annually in Scotland in pig levies but this would be dramatically reduced if the plant was closed.
When the 90 day notice of closure was given, it was reckoned that up to £500,000 could be lost to QMS if every pig currently processed at Bathgate went to England.
QMS chairman Jim McLaren emphasised that that was a worst case scenario and that talks would continue with Vion to help produce a soft landing from any change.
And although there is yet no substance to the many rumours going around the Scottish pig industry of other processors moving in, or increasing their throughput of pigs, the expectation is now that this will be the case for a least a proportion of the Vion kill.
Morton said he would be taking a report to the QMS board in November after assessing the impact of the closure.
A regular item on any financial report on QMS is the loss of levies through lamb being produced in Scotland but then slaughtered in England.
It is reckoned that Scotland and Wales each lose around £1m annually because levies are collected at point of slaughter. So far, the politicians have not been prepared to pick this issue up but Morton said it was now on the agenda for the next meeting of UK agricultural ministers later this month.
Earlier, McLaren had said that at their next meeting with Defra ministers he would be stressing the importance of coupling support in the forthcoming reform of the Common Agricultural Policy.
This was vital for Scotland in retaining its cattle and sheep numbers as they form the basis of an industry worth some £2.1 billion to the Scottish economy last year.
