Pilgrim’s announces major losses and two site closures

Pilgrim’s UK made an operating loss of £20m in the year to December 2021, according to its latest annual report.

The major pork processor stated that inflation in the supply chain, low pig prices and adverse market conditions were all contributing factors in this loss.

Rising costs of labour, feed, packaging and utilities led to increased costs at Pilgrim’s during 2021.

See also: How will red meat markets fare during the rest of 2022?

During the same period, low pig prices reportedly led to a 1% decline in revenue, despite a 3% growth in total volumes.

The full accounts for Pilgrim’s Pride showed a pre-tax loss of £20.9m for the 52 weeks ending 26 December 2021, compared with a pre-tax profit of £6.4m during the same period in 2020.

Turnover totalled £1.055bn, while cost of sales stood at £982m.

In its strategic report, Pilgrim’s outlined a list of principal risks and uncertainties facing the business, including input cost inflation, diseases such as African swine fever, consumer demand, food safety, recruitment, Brexit and Covid-19.

National Pig Association senior policy adviser Rebecca Veale said the losses are indicative of the industry as a whole in terms of challenges they are facing around rising input costs.

“Every business at the moment is having to rationalise and explore where it can make best efficiencies and Pilgrim’s is not in isolation there,” she said.

Pilgrim’s UK president Ivan Siqueira said: “Market conditions in 2021 and the first half of 2022 were the most severe the sector has known, and conditions remain challenging.

“In the face of these challenges, our commitment to backing British farmers and delivering the highest quality and most innovative food to our customers has been unwavering.”

Site closures

Pilgrim’s has announced plans to close two sites at Bury St Edmunds, Suffolk, and Coalville, Leicestershire.

Both of these are packing sites and operations are set to move to other locations within the business.

Pilgrim’s will also move permanently to a four-day week at its plant in Ashton, Manchester.

Almost 700 jobs are due to be at risk as a result of these changes.

A spokesperson for Pilgrim’s UK said: “The decision to propose the closure of our Coalville and Bury St Edmunds sites and put a number of roles at risk at Ashton has not been taken lightly, but is unfortunately essential to help our business recover and secure a sustainable future for all of our team members across the UK.”

Wider sector

The abattoir sector has been in decline for a number of years, with just 87 abattoirs in England slaughtering pigs in 2021, down from 93 in 2020.

The sector has been consolidating, with the eight largest pig abattoirs accounting for 83% share of the total English kill, according to industry figures.

The AHDB said that although consolidation may pose benefits for efficiency, concentrating slaughter presents a risk if one or more of the larger plants has a major breakdown or has to reduce capacity.