Uel Morton's Address to SFMTA AGM

World issues
Appropriate when looking at global trends on food production on a Sunday morning to perhaps take some time to consider those much worse off than ourselves. A recent presentation to an International Meat Secretariat Conference revealed that Sub Saharan Africa is the only region in the world where the number of hungry people has risen – up 19% during the last decade.

More than half of the region's 350 million population are hungry.

In South Africa itself, the richest country in Africa over 30% of pre school children are 'stunted' in their growth.

With the global population growing exponentially, with estimates of nearly 9 billion by 2042, food security is the key issue of our times. Population today is 6.72 bn and 2042 is only 34 years away.

European issues
Bluetongue – Situation regarding the Bluetongue virus becoming increasingly concerning. Cattle imported to a farm in north of England have tested positive for the BTV1 strain of the virus – that's NOT the one farmers are currently vaccinating for. QMS agrees a ban on all livestock shipments from virus protection zones on the continent could be used to protect the livelihood of red meat industry businesses in Scotland.

Bovine TB – The European Commission has presented a draft proposal to Scofcah, the standing committee on the food chain and animal health, to regulate exports of calves. Should it be accepted the impact is likely to be significant. Scotland has a much lower incidence than UK figures.

BSE – Agreement reached at Scofcah on possibility for Member States in the EU – 15 to raise the age of BSE testing up to 48 months. If all goes to plan this could be in place by the beginning of next year. The Food Standards Agency is already examining how decision can be applied in the UK. Certain to take cost out of the production process.

The Waste Framework Directive – Has now been adopted and gives clarity on what should happen in a number of important areas such as recycling, recovery and waste itself. It draws a line between waste and waste products and defines when waste that has been recovered through recycling and other treatments can stop being waste. The WFD and the Commission's proposal on animal by products suggest there could be positive developments in the medium term as far as the burning of tallow is concerned.

GMOs – Statistics indicate an increase in the use of GM crops in Europe this year but Member States continue to disagree about possible changes to the authorisation process for GMOs. A study shows that the EU zero tolerance policy cost 2.5bn euros to the food industry in 06-07 and forecasts that if the situation remains unchanged the livestock sector could suffer a massive loss of competitiveness.

Green Paper on Quality – QMS has contributed to the opening debate on how to help European farmers make the most of the quality of the food they produce. The Commission's Green Paper aims to canvass opinion on the range of standards, quality and certification programmes and labelling schemes that currently operate within the EU, including PGIs. The idea is to see what could be done better and to exploit the strengths of EU farming.

UK issues – QMS delighted that the threat of strike action by MHS inspectors has been averted. The impact on your businesses of strike action in the run up to Christmas would have been disastrous – historically there's a typical 20% uplift in meat sales at this time. Let's hope common sense will prevail in the New Year and agreement is reached.

Scotland – Declining livestock numbers continue to be a concern for all, it's vital we maintain our critical mass of livestock if we are to retain our status as a world class producer of quality meat and meat products. QMS continues to put a strong case to Government on funding and actions needed to support red meat production.

Quality Assurance – QMS continues to facilitate the schemes in Scotland and one of the issues to arise this year has been pressure from the composting industry for inclusion of food waste in compost which can be applied to land. Our cattle and sheep standards setting body has adopted a precautionary principle in this regard and is awaiting the results of further work in this area.

Training & Development – The Federation does much useful work in this area and at QMS we are pleased to have assisted in recent approaches to Government.

Consumption – Most recent data shows Scots are eating 7.1 kg of beef per year or 137 grams a week, 7% more than the rest of the UK and this figure has risen over the last 3 years. They eat 1.3 kg of lamb per year, less than half of the overall UK figure, but this has increased marginally.

Consumption of pork has dropped slightly with Scots eating 1.6 kg per year.

Interesting trends emerging during credit crunch times which no doubt you are seeing first hand: shoppers looking for cheaper cuts, more food being cooked from scratch, a return to stews and the like. It's not always a case of what is the cheapest though, as sales of premium sausages are on the increase.

Health – You may have spotted more newspaper coverage this week from the World Cancer Research Fund who had carried out a poll to determine attitudes to food in the wake of their most recent report which recommended people cut back on their meat and meat product intake.

Whilst we can't stop organisations like WCRF saying what they do it makes it even more important that meat organisations like QMS and of course SFMTA continue sending out a positive and balanced message about eating red meat as part of a healthy diet.

Scotch versus Scottish versus Saltire branding
QMS has been concerned about the issue of consumer confusion for some years. Only last year we raised our concerns with Government about the use of the Saltire by multiple retailers. Our concerns were based on the fact that no definition exists of what the Saltire means as a brand on food – Made in Scotland? Produced in Scotland? Bought from a Scottish wholesaler? Retailed by a Scottish retailer? Retailed by an English retailer in Scotland?

We are, however, clear about the meaning of Scotch, born, reared and slaughtered in Scotland and produced in accordance with QMS' assurance scheme.

I'd like to now give you a quick run through of our varied and different Health & Education activities as this is an area which has increased its profile and importance within QMS.

New Health & Education Coordinator – Jennifer Robertson
• Extra funds allocated – full time position
• Added credibility – registered Dietitian
• Skills i.e. nutritional analysis of recipes

School Activities
• Continue as QMS offers regular primary and secondary school educational sessions and cooking demonstrations across Scotland

QMS Meat Voucher Scheme
• Was piloted in Glasgow last year, £100 voucher to purchase meat from local butchers as well as copy of bespoke recipe book for each pupil
• Roll out this year to approx 100 secondary schools throughout East Central Scotland and the Borders
• Excellent feedback last year and many positive comments already received

During the past year we ran two Health & Education Campaigns
Feel Good About Meat
• Launched January 2008 to promote proven health benefits of eating red meat
• Development of factual information leaflets, website as well as extensive media campaign – ads remain on several LRT buses!
• Mail out to members of SBC will again take place early 2009
Quick & Easy
• New attractive recipe book with simple nutritious recipes for busy families
• 6 out of 9 recipes are Mince based, with 4 of those using the same simple bolognaise recipe
• Mail out to members of SBC very soon

Sporting Links
• QMS maintains strong links with Scottish sports stars particularly with sport nutrition guide “Performance Plus”
• Widely distributed across Scotland including the SRU and SFA. Most recent requests have come from the Scottish Youth Commonwealth Games Team and Women's National Volleyball Team
• New project – support of Winning Scotland Foundation's “Champions in Schools” to be launched next month

Healthy Living Initiatives
• NHS Health Scotland meeting only this week
• Participation in National Childhood Obesity conference highlighting the Industry's role
• Participation in British Nutrition Conferences for School Teachers

QMS Update
• QMS's status officially changed from a private company to that of a non-departmental Public Body from 1st April. As a public body QMS is subject to higher levels of scrutiny and corporate governance.

• Past President of SFMTA in the early seventies Jim Royan (still involved with the industry today!) was appointed by the Scottish Government to the QMS Board

• The definition of levy payer was changed to mean the producer, slaughterer or owner of animals at the time of slaughter. This is particularly important since it meant that butchers who buy cattle for slaughter were for the first time clearly recognised as levy payers.

• The new Board has had a busy year so far and one of the main priorities has been strategy development. I would like to come along to your March Executive to give you an update as one of our stakeholders.

Some more Marketing stats

• Times are tough for consumers and we are seeing increased demand for cheaper cuts for example mince, which is where our Quick & Easy recipe book comes in useful.

• Growth in sales in the independent sector by 2.8% in value terms, in line with the total market in Scotland.

• The butcher market experienced a higher rate of price increase of 8% year on year with the average for the year sitting at £7.58 per kg.

• This is around 35% higher than the average price per kg for the total meat market in Scotland at £5.63 per kg.

• The butchery market in Scotland represents 17% of the value sales and 13% of volume sales in the retail market in Scotland. This is ahead of the GB picture with butchers in the GB market representing 13% of the value and 11% of the volume sales.

And finally the Recession

• Cooking methods have begun to alter, as cooking from scratch is on the increase; and though over 45's are still the core consumer, children are consuming 28.7% more scratch cooked savoury meals than they were in 2005.

• Eating at home is growing at the expense of eating out and now accounts for 77% of all eating and drinking occasions. We are also seeing increases in entertaining this year up 28% from last summer.

• Consumers are trying to waste less and use up left overs.

• The make up of the household diet is also changing, with evidence that starchy staple foods such as bread, potatoes, pasta and rice are all on the increase.

As in any changing market situation success will come to those who recognise the changes and adapt their businesses to give their customers what they want.

As I travel around Scotland I never fail to be impressed with the quality, range and presentation of red meat products in butchers premises. Of course, as an industry we are facing issues as highlighted earlier but by working together through your Federation and the good offices of Douglas, Bruce and the team we stand a better chance of success in the future.

QMS has had to change its approach over the years and I look forward to seeing the changes which a new President in Stuart Christie will bring to the Federation. I'd like to add my congratulations and best wishes to Stuart as he enters his period in high office.

I'd like to conclude by thanking Jamie Chapman for the very business like manner in which he has conducted the Federation's affairs with QMS over the past two years and I very much look forward to working with Stuart and the Executive team as we proceed together into the future.

Thank you for listening and as I am not rushing away, I am available for questions.