Meeting with QMS

Present: Stuart Christie, Ian Faulds, Alan Kennedy, Douglas Scott
Uel Morton, Donald Biggar, Jim Royan, Susan Kinniburgh

Douglas Scott gave a resume of SFMTA / SMT activities before Uel Morton made a presentation. The QMS presentation covered:-

Purposes of QMS (from SI)
 Increasing efficiency in the red meat sector
 Improving marketing in the red meat sector
 Improving or developing services that the red meat sector provides to the community
 Improving the ways in which the red meat sector contributes to sustainable development

QMS income from levy is now dropping from a high of £6.25m in 2008. Grants in 2009 will total £943,000 – £438,000 from Scottish Government, £305,000 from Europe, £159,000 from Scottish Enterprise and Others £ 40k. Every £1 of levy received last year attracted an additional 24p.
An immediate 24% return on investment.

Expenditure excluding the £1.4m Quality Assurance spend, includes £3m in 2008 but this will drop to under £2m in 2010. In 2009-10 QMS's expenditure will be £4.62m – £1.295m on Industry Development, £1.989m on Marketing, £473,000 on Communications Education and Health, £250,000 on economic services, £613,000 on corporate services inc contribution to Scotland Food and Drink.

It was claimed that QMS' marketing activities safeguard the £46m Scottish origin premium.

Of the total spend of £1.989m on Marketing, 37% is spent on consumer (generic), 15% on Multiples, 5% on Independents, 28% on Exports, 12% on Research and 3% on Foodservice.
Multiple retailers include Cash & Carry – Independent retailers include Catering wholesalers.

Industry Development spend in 2009-10 is 33% on Pigs, 20% on R&D, 13% on 5th Quarter, 13% on Monitor Farms, 8% on Eating Quality, 9% on Sheep Strategy.

Promoting and defending the industry's reputation through PR, Events and Health & Education: Annual budget £473k. This funds a full time health and nutrition adviser – Jennifer Robertson.

A new QMS website will be launched soon.

Public relations is the practice of managing the communication between an organisation and its publics. 110 media releases in 08″09, constant story gathering, offering exclusives, setting up interviews, taking part in events, writing columns, offering comments. QMS aim to be “the people journalists call for an opinion”.

Health & Education includes support for
School workshops and cooking demonstrations
£100 Meat Voucher Scheme – approx 100 schools in H&I, Aberdeenshire, Moray & Inverclyde
Sponsorship of health and wellbeing category in Scottish Education Awards guaranteeing positive coverage in the Daily Record.
Nutritional analysis of QMS recipes
Respond on behalf of industry to health and nutrition related consultations,
Presentations at National Childhood Obesity Conference and British Nutrition Foundation Teachers Conferences
Ensuring Scotland's kids know the importance of red meat as part of a healthy balanced diet.

Events
Taking the QMS message direct to the consumer and stakeholders
Includes high profile attendance at events such as RHS and BBC Good Food Show
As well as other industry events such as: – AgriScot, Scotsheep, Winter Fair
Events showcasing PGI and PDO foods.

All the above led to a case for QMS to increase levy.

Key Points on Finances
£159k deficit for year ended March 09
Exposure to £200k extraordinary levy loss due to plant fire (closed April – October)
Board decision June 08 to maintain budgeted activity levels and fund up to £200k from reserves
Can only spend reserves once

This is the first opportunity that QMS have had since becoming a NDPG, to raise the amount paid in levy. They propose an increase in Cattle from 437p to 550p; lamb 67p to 80p and pigs 105p to 126p.

Levy as a percentage of average head value has decreased, breeding stock has declined, lamb kill has dropped and cattle kill is dropping. All this leaves QMS a significant shortfall in income required to fund their current activity. The income generated from the increase in funds will produce £800,000.