Lidl announces new COP-linked contracts, as part of £500m pork sector commitment

Lidl has announced new pig contracts linked to cost of production, as part of a £500 million commitment to the British pork sector.

The discount retailer has developed the Lidl Pork Standard, which includes an ‘open-book’ producer costing model, with an on-farm cost of production model, guaranteeing minimum producer volumes and includes a fixed margin for farmers.

This initiative was developed in collaboration with pork producers through its newly-created ‘Lidl Pork Producer Group’, in recognition, the retailer said, of the need for a more sustainable pricing model within the pork sector for suppliers and farmers.

The new arrangements also involve a partnership with two of the country’s biggest pork processors, Cranswick and Pilgrim’s UK.

Through its new pork producer group, Lidl will also fund research and development projects aimed at mimicking the natural behaviours of pigs, such as rooting, sniffing and chewing, in turn improving their overall wellbeing. In a new trial, 3D cameras have been introduced to record the nature and frequency of the animals’ enrichment interactions, with the data being subsequently used to enhance welfare.

As part of the three-pronged approach - involving 'people, pigs and planets - and through collaborative efforts, Lidl is also investing in assessing the carbon footprint of all the farms in its pork producer group and subsequently putting plans in place to reduce these emissions. Alongside this, it will also be investing over £250,000 in at-risk GB catchments to support river health and water quality, while working to achieve deforestation-free soy sourcing by the end of 2025.

The retailer said this amounted to an investment of £500m to bolster the British pork industry, ensuring ‘the continued production of high-quality British product at the best possible prices for customers’.

Even though it is the sixth largest retailer in terms of market share, Lidl is the fourth-largest retailer in the fresh pork category with an 11% market share, according to Kantar data. It said it was taking action to address recent sector-wide challenges, including rising costs, a Chinese import ban on EU pork and butcher shortages, which led to the pig backlog and financial worries for producers.

Commitment

Richard Bourns, Chief Commercial Officer at Lidl GB, said: “This latest investment underlines our commitment to British producers, animal welfare and the environment.

“Acknowledging the challenges faced by the industry and its farmers in recent years, we recognised the need for intervention and the development of a bespoke solution addressing these challenges. 

“Our new pork standard is all about supporting our rural communities and ensuring the resilience of the sector while providing customers with high-quality British pork at affordable prices.”

Rick Buckle (pictured), Managing Director Farms – Pork Division at Cranswick Plc, said: “It’s great to see Lidl’s continued commitment to British pig farming and we’re thrilled to be working with them on its new standard. Together, we’ve already commenced groundbreaking research trials aimed at enhancing pig welfare and are excited to work in partnership with Lidl for years to come.”

Fábio Brancher, Operations Director for Agriculture at Pilgrim’s Europe, commented: “With Lidl’s support, this collaborative approach will provide crucial stability for our third-party farmers, shielding them from market volatility and aiding their recovery from recent challenges.

“This next step with Lidl underscores our commitment to supporting British farmers and fostering a sustainable future for the sector, and we look forward to developing our relationship further.”

NPA chief executive Lizzie Wilson added: “The NPA welcomes the introduction of Lidl’s pork producer contracts and its continued commitment to ensuring a sustainable domestic supply of British pork.

“By guaranteeing margins, these sorts of contracts will deliver stability over time and enable producers to plan for the future."