BMPA’s submission on the impact of discounts on official controls charges

In response to the Food Standards Agency (FSA) call for evidence regarding the impact of discounts on official control (OC) charges in the meat industry, the British Meat Processors Association (BMPA) has provided extensive feedback. One of the key points we have made is the crucial role these discounts play in balancing costs across the supply chain, supporting local economies, and maintaining diversity within the UK meat sector. In this article, we outline BMPA’s insights on the benefits, potential drawbacks, and future considerations for these discount policies.

Benefits of discounts on official control charges

We argue that discounts on FSA charges are vital for consumers, food business operators (FBOs), retailers, and the wider economy. The application of discounts helps keep meat prices more affordable for consumers, indirectly curbing food inflation.

Given the low profitability of standalone slaughtering operations, discounts help ensure that costs are not disproportionately passed up or down the supply chain. They soften the impact of extra costs and protect farmers and retailers with less economic power.

They also provide much needed support for smaller slaughterhouses, which play a crucial role in rural economies by servicing local livestock farmers who might struggle to access larger facilities. Small abattoirs not only provide slaughtering services but are often part of a larger production network involving multiple third-party businesses that rely on a consistent meat supply. Without discounts, the closure of these abattoirs would lead to regional economic repercussions, reducing job opportunities and consumer choice in local markets.

Administrative efficiency and economic viability

In our submission we also point out that the FSA’s administrative burden in managing discounts is relatively low, especially given the substantial financial impact discounts provide to the meat industry. We also stress that further reductions in discount funding would destabilise the sector. To give some context, since 2016, while FSA costs have increased by 19%, discount funding has dropped by 35%, which has resulted in a 76% increase in charges to the meat industry, placing unsustainable pressure on FBOs. We therefore call for stability and certainty, proposing that discount levels be frozen and protected from further cuts.

Risks of removing or reducing discounts

The removal of discounts would likely result in several adverse outcomes. As costs rise, the rate of smaller slaughterhouse closures would likely accelerate, reducing the number from just over 200 facilities to fewer than 100. This would have a knock-on effect, causing livestock farmers to struggle with limited slaughter options and reducing overall food system diversity. It would also lead to reduced consumer choice and higher prices for local meat products.

BMPA’s recommendations for the FSA and policy makers

To address these concerns, the BMPA suggests several policy adjustments. We would advocate for a jointly led review involving industry stakeholders, the FSA, and the Government. This review should carefully consider Subsidy Control requirements and prioritise cost-efficiency within the discount system.

We also highlight the need for a global comparative benchmarking study to ensure that UK meat processing facilities are not at a competitive disadvantage, especially in the face of rising inspection costs and full-cost recovery demands.

Our submission underscores the essential role that discounts on official control charges play in maintaining affordability, supporting local economies, and ensuring the survival of smaller abattoirs. Our clear message is a call for a balanced approach to the FSA’s charging policies, which would preserve the diversity and resilience of the UK’s meat sector while avoiding further cost pressures that threaten its viability.

You can read the full submission in our Members Portal.