Losses pile up amid soaring fuel costs at Hall’s site

Published on 07/07/2012 00:52

Dutch food company Vion said the Hall’s site had recorded “unsustainable losses” of as much as £79,000 a day or 
£2.4 million a year.

The company is understood to view its main problems as soaring fuel costs and a massive overcapacity in the factory. It has the capacity to process 20,000 pigs a week, but the current weekly production figure is about 7,000.

The plant is 30 years old and is regarded as an old-fashioned production site. Vion’s more modern European sites are reported to be equipped to process 60,000 pigs a week.

Company bosses say they have invested millions in Broxburn, but there is a continued loss to the firm.

Vion also claims it faces increased feed costs for the pigs processed at the factory. Without the slaughtering capacity at Hall’s, it is likely pigs would be sent to Yorkshire.

A report by the Centre for Research on Socio-Cultural Change (CRESC) highlighted concerns for the meat-production sector, days before Hall’s of Broxburn announced 1,700 jobs could be lost.

Responding to the potential closure, CRESC director Karel Williams, a professor at the University of Manchester, said: “Part of the problem is the trader mentality of the supermarket buyers, which results in fluctuations in demand and limits capacity utilisation resulting in losses.

“The striking thing is that pig meat consumption is actually rising, but without supermarkets guaranteeing continuous demand for processors, the outcome like that of Hall’s will continue.”

Research in the CRESC report, entitled Bringing Home the Bacon, highlighted reasons why policy makers should take more notice of the sector.

It warned the pig meat supply chain was in long-term crisis, with the British pig herd declining by about half in the past decade. Imports mainly come from Denmark and the Netherlands – produced more cheaply 
but by people whose 
wages are nearly 
double 
those in 
 the UK.