European beef prices collapse in wake of BSE crisis

Date: 04/04/1996

By Michael Mann

IF the European Commission required any further evidence to rebut criticism of its decision to impose a world-wide ban on UK beef exports, it need only point to the dramatic slump in prices right across the EU since the crisis began.

Not even the Commission is able to provide reliable figures on the extent of the problem, but meat industry experts put the overall collapse in beef prices at between 20&percent; and 50&percent;, depending on the country, since the revelations by the UK government about a possible risk to human health from mad cow disease two weeks ago.

Prices at Belgium's largest market yesterday (2 April) were a further 20&percent; down on the previous week's figures, when the crisis had already been raging for the best part of a week.

French prices are estimated to be 40-50&percent; lower than before the announcement of a possible link between BSE and the human illness Creutzfeldt-Jakob Disease (CJD), even though beef prices normally firm in the run-up to the Easter holiday period. Representatives of the German meat industry claim that “sales have come to an almost total halt”. German consumers are regarded as among the most safety conscious in the Union.

Commission officials believe that consumer reaction has been much more extreme in the northern member states than in the south, but officials at EU farmers' union COPA stress that even in Portugal, Spain and Italy, the situation is extremely severe.

Greek retail sales initially fell by almost 80&percent;, according to retailers' associations, and Italy has seen a decline of about 30&percent;.

In the minds of Europe's consumers, the risks are not limited to British beef.

Sales in Portugal are estimated to have fallen by 50&percent; last week, even though most of its supplies come from Belgium, Germany and France.

“There's no doubt that the knock-on has been at its worst in France, Germany and Belgium,” commented a COPA official.

The Commission is still awaiting definitive information from around the capitals on the fall-out from the BSE scare, and will only be able to decide which countries qualify for intervention purchases when it has firm “dead weight” price statistics.

Clearly, last week's purchase of 140 tonnes of British beef into EU storage will be the first of many purchases across the Union, although officials stress “the major impact is yet to be established”.

Even worse news for the meat industry is evidence that other types of meat are not reaping the benefits many expected from the loss of confidence in beef.

In the UK, sheep prices initially rose by 25&percent; in the wake of the BSE announcement, but they had fallen back to pre-scare levels by the end of the first week.

Nor, say meat industry officials, have there been significant increases in sales of pig meat or poultry, markets which were expected to benefit from the crisis. “There seems to be a spill-over in a general reluctance to eat meat,” said one market observer.

Beef sales in the UK collapsed completely in the immediate aftermath of the government's unveiling of the latest research into CJD, but reports suggest that extreme price-cutting by the major supermarket chains has enticed many shoppers into buying beef.

“Most consumers across the Union are taking a prudent approach although there seem to be two types of consumers, those who are avoiding meat and those who are taking the opportunity to get a bargain,” concluded a Commission official.