Challenge for the grocery trade
Despite the low prices for pork, supermarkets and discounters are largely foregoing sales-boosting campaigns. Demand is tending to decrease – in 2021 it was lower anyway, due to the restrictions imposed by corona requirements.
A low-price advertising ban for meat planned by Julia Klöckner (Federal Minister for Food and Agriculture) and public opinion increase the pressure on dealers. They fear regulations and do not want to risk a loss of image among consumers. In particular, farmers who practice conventional pig farming are also coming under increasing pressure.
Crisis aid for German pig farmers: trade pays extra charge
Several supermarkets support their regional suppliers with payments above market level. Stable pork prices allow them more planning security after the sales crisis.
At the end of 2020, the Schwarz Group, operator of Kaufland and Lidl, also made available 50 million euros to help farmers. In particular, the support should serve to mitigate the adverse effects of the corona pandemic and African swine fever.
Guaranteed minimum prices and bonuses for animal welfare as well as renunciation of genetic engineering
The supermarket chain Kaufland recently started paying suppliers a permanent minimum price of 1.40 euros per kilo of pork from level 2 farming. In addition, the company has introduced an animal welfare bonus. GMO-free feeding rewards it with another additional payment.
REWE has been paying a pork price since the end of 2020 that corresponds to the price before the outbreak of African swine fever and the resulting ban on exports. Lidl has been doing a similar thing for over a year. The discounter pays prices based on a price of over 1.45 euros per kilo of meat.
Criticism from all sides: Price war continues
Dealers, such as EDEKA, are now appealing to the meat industry to adjust their prices in view of the cheap raw materials available. For their part, the manufacturers refer to increased operating and transport costs. In addition, according to meat manufacturers, the retail trade achieves significantly higher margins because of the waiver of campaigns.
The farmers, on the other hand, criticize that the aid to compensate for too low pork prices is insufficient and generally demand higher prices for all producers. It remains to be seen which political measures will follow and how the pork prices will develop in the future in the course of the negotiations between all actors involved.