Price increase won't deter consumers

New research shows increasing the price paid to livestock farmers would have little impact on consumer buying patterns for most beef and lamb cuts.

It also provides clear evidence that English consumers DO differentiate on the basis of provenance when buying beef and lamb.

The research, from the English Beef and Lamb Executive (EBLEX), is based on data going back to 2002. It shows that for beef mince, increasing the farmgate price by 10% would lead to a 5.9% increase in the retail price with only a corresponding 1.7% drop in sales.

It's a similar story for lamb mince, with a 10% producer price increase translating into a 2% increase in the price on shelf and a 0.8% drop in sales.

For lamb chops, an identical farmgate price increase would lead to a 3.1% increase in retail prices with a 1.3% drop in sales. *

EBLEX Chief Executive Richard Ali called for the beef and lamb supply chain to take a fresh look at pricing relationships.

He said: "This research shows there is room to pay farmers more by increasing retail prices for a range of beef and lamb cuts without causing any dramatic drop in sales.

"It also shows that no one in the supply chain benefits from retail price competition on key household staples like mince.

"Post CAP reform the majority of our beef and lamb farmers are finding it impossible to make a profit. The long term sustainability of home-produced beef and lamb lies in a combination of business improvement and improved farmgate prices."

An Analysis of Retail Meat Demand published today (1 June) by EBLEX considers the price elasticity of fresh beef and lamb across a number of different cuts and from various countries of origin.

It shows consumers are more prepared to accept price increases on quality English beef and lamb than on commodity beef and lamb.