22 December 2009

3 minute read

Europe

Donald Biggar, QMS chairman, said the levy increase – the first for eight years - will ensure the Scottish red meat industry is underpinned by a sound level of investment in marketing and promotion and improving industry efficiency.

"As an organisation we had reached a financial crossroads, faced with scaling back our activities on behalf of the Scottish red meat industry. However, today’s announcement will allow QMS’s marketing and promotion expenditure to return to over £2.5m and maintain industry development spend at over £1m. It will also allow QMS to continue to respond robustly to challenges such as the anti-meat lobby,” said Mr Biggar.

• The increase in levy rates, effective from April 2010, is as follows: cattle - 93p; sheep - 13p and pigs - 21p.
  
  
• Levy rates have remained unchanged since 2001 for cattle and sheep, and since 1999 for pigs. During that period inflationary erosion coupled with reducing numbers of livestock produced in Scotland have impacted on QMS’s spending power from levy.
  
  
• Since 2001 static levy rates have failed to keep pace with the average price producers receive for their livestock. In that time cattle, sheep and pig prices have all increased by a consistent 58 per cent. Current levy rates as a percentage of average livestock values are relatively small – less than 0.5 per cent for cattle and around one per cent for sheep and pigs.
  
  
• Without a levy increase, the anticipated decline in QMS’s income during the next financial year and beyond, would limit its ability to promote the brands (Scotch Beef, Scotch Lamb and Specially Selected Pork) and improve the efficiency of the red meat supply chain in Scotland.
  
  
• Income from levy in 2008/09 was down to £3.9m compared with £4.2m in 2007/08, with estimated income for 2009/10 down to £3.7m. One example of the squeeze on resources was the consolidation of Scotch Lamb marketing campaigns from spring and autumn to autumn-only this year.

NFU Scotland Chief Executive James Withers said: “Those of our members who made use of the recent opportunities to hear about QMS's future plans left those meetings with a fuller appreciation of the work done to promote our red meat sector and were broadly supportive of a levy increase to continue that effort. Those we have spoken to outside those meetings by and large share the same sentiment.

“QMS has to be in a position to deliver a wide range of services - promotion, research and development, market information - as well as being well placed to counter the growing volume of negative publicity affecting the production and consumption of red meat.

“Margins in the livestock sector continue to be challenging, however no industry moves forward without investing in its future. Indeed, at a time of both challenge and opportunity for Scotland’s red meat sector, it would have been counter-productive to preside over a downsizing of this area of work.

“This levy increase will give QMS a collective strength on developing and marketing Scotland's meat industry that 14,000 individual businesses can't possibly achieve on their own.”

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