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Sent packing - Germany sets out to fry the cheap meat trade

Paul Carrel and Andreas Rinke
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Sent packing - Germany sets out to fry the cheap meat trade

FILE PHOTO: Sausages are displayed in a supermarket in Berlin

By Paul Carrel and Andreas Rinke

BERLIN (Reuters) - How much should a slice of meat cost? More, says German Agriculture Minister Julia Kloeckner.

    Following a coronavirus outbreak at a German abattoir which cast a spotlight on standards in the industry, Kloeckner is trying to wean German households - many on tight budgets - off low-cost meat.

    "Meat is too cheap," Kloeckner told Reuters. "Lurid advertising with low prices for meat does not fit with appreciation and sustainability ... This is no longer acceptable."

Cut price meat, from peppered salami to the traditional sausage or Wurst, is a staple for many German consumers but a recent COVID-19 outbreak at a meat plant in the west of the country has raised questions about some of the measures taken to keep prices down.

Efforts to track down people affected by the virus were hampered when some slaughterhouses were unable to give the home addresses of all their workers because they were relying on sub-contracting firms to supply them with migrant labour.

Some of the sub-contracting firms were themselves also relying on sub-contractors to get them staff.

    German Labour Minister Hubertus Heil condemned the system of "sub-sub-sub-contracting" in abattoirs and is introducing a new law compelling meatpackers to employ staff directly.

    In addition, Agriculture Minister Kloeckner plans a raft of measures to address what she calls the "serious consequences" of downward meat price pressures on animal welfare, working conditions in abattoirs and farmers' incomes - a move she knows risks driving business abroad, with a loss of control over standards.


    "NO JUNK PRODUCT"

    Kloeckner has proposed an animal welfare levy to compensate farmers for the cost of better husbandry of their livestock and to counter the risk of driving meat processing abroad, she will also push for European animal welfare labelling on meat goods.

    "Meat should not be a luxury commodity for the rich, but also not an everyday junk product," she said at a meeting with meat industry and retail representatives on June 26.

The cost of living website Numbeo estimates a kilo of beef leg costs 10.64 euros in Germany against 16.67 euros in France, 14.58 euros in the Netherlands or 12.32 euros in Denmark.

    German meat processing industry association VDF said the industry will accept change.

    "The sector has decided to depart from the system of worker contracts in slaughtering, cutting and packing of meat as fast as possible," VDF director Heike Harstick said.

    German poultry meatpackers will also end sub-contracting by early 2021, but the transfer to permanent employment will lead to rising production costs and so higher prices for poultry meat products, association ZDG said.

    "We expect that food retailers and consumers show willingness to accept these costs," ZDG president Friedrich-Otto Ripke said.

    The German farmers' association DBV also supported the government's move on slaughterhouses.

    Taken together, Kloeckner's plans and a government move to tighten meat processing labour standards are sure to push up meat prices and lessen Germany's comparative advantage in the trade versus other west European countries, Hubertus Gay, senior agricultural policy analyst at the OECD, said.

    "The question is how much less - will it only affect additional growth (in the German market) or will it lead to a reduction compared to others? There, it's too early to call," he said.

    However the impact on retail prices may be relatively moderate.

    "Feed usually makes up the largest cost block in meat production while the cost of slaughtering makes up a relatively small share of the cost per kilogram of meat," said Rabobank analyst Stefan Vogel.


(Reporting by Paul Carrel and Andreas Rinke, additional reporting by Michael Hogan, editing by David Evans)