HCC analysis identifies investment need to sustain £461m abattoir sector

Cattle, sheep and pig slaughtering businesses in Wales contribute a huge £461m every year to the Welsh economy but need investment backing if they are to sustain this dynamic performance, a HCC sectoral analysis concludes.

Industry throughput is dominated by large abattoirs - just under 90 per cent - but the remaining small and medium abattoirs play a significant part in supporting local communities, the rural economy and enabling local food businesses and sourcing.

Hybu Cig Cymru-Meat Promotion Wales’ (HCC’s) Assessment of Capacity in the Welsh Red Meat Slaughtering Industry flags up a number of challenges that face the red meat industry in Wales, some of which have a substantial impact on the future resilience, performance and profitability of the abattoir sector.

These are:

Declining livestock numbers;

Regulatory compliance - increasing amount of regulation;

Limited plant infrastructure - specifically chillers;

By-product disposal arrangements - disposal generally outweighs margins;

Decreasing value of hides, skins and offal;

A shortage of skilled slaughter and butchery workers;

Limitations on succession planning and its impacts on business development; and

Limitations of customer base.


The report calculatescattlethroughput through Welsh abattoirs in 2014 was 120,400 head, worth approximately £186 million; sheep throughput was 3.4 million head worth approximately £271 million and pig throughput 32,900 head worth approximately £4 million.

“The Welsh red meat slaughtering industry is therefore calculated to be contributing approximately £461 million per annum to the Welsh economy demonstrating the significance of the sector,” says the report.

It points out that “the Welsh red meat slaughtering industry has for many years faced a continuing underlying problem of fluctuating, and at times low, profitability. The sector as a whole suffers from underinvestment, especially among small and medium enterprises, at a time when investment requirements are growing, whether to meet the stringent hygiene requirements, or retailer as well as consumer demands for more innovative convenience foods.

“Margins have also come under pressure from lower fifth quarter returns, costs of by-product disposal and the sourcing policies of the multiple retailers and other customers. All these factors have led to a continuing trend of fewer abattoirs operating, both within Wales and across GB as a whole.”

The report estimates that the maximum combined capacity of the abattoirs slaughtering cattle, sheep and pigs in Wales is approximately 17 per cent, 41-72 per cent and 32 per cent respectively over current utilisation but emphasises that these projections are heavily dependent on market, commercial and individual business influences and trends.

It concludes that the challenges the industry is facing will have a substantial impact on the future resilience, performance and profitability of the sector. “These factors raise concerns over the long-term viability of Welsh abattoirs without future investment in this sector.”

The report - Assessment of Capacity in the Welsh Red Meat Slaughtering Industry – can be found here: