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Green Light for French Turkey Industry's New Agreement

by 5m Editor
3 September 2011, at 12:00am

The French Competition Authority has approved a fresh cross-sector agreement drawn up by the national turkey committee (CIDEF) as part of the implementation of the Loi pour la Modernisation de l'Agriculture et la PĂȘche.

The new industry standard contract will cover transactions between producers and processors for all grades of turkey (standard or accreditation), estimated to account for around 80% of French production, but not vertically-integrated production groups.

The LMA started to lay down concepts for contractualisation in the cattle sector back in April and it envisaged that at some stage food will only be transported with full documentation, including a copy of the contact under which it was produced. More details can be seen in our previous article on the French LMA and Incoterms.

Since it is primarily a set of technical measures to improve production standards, the agreement extend to retail transactions. Nor does it stipulate any minimum volumes, duration or prices.

Within the document, the French competition authority discusses a wide range of poultry industry data supplied by CIDEF, which estimates EU 2010 turkey production, at 1.8 million tonnes carcase equivalent (tec), second only to the US (2.6 million tec).

With provisional 2010 output of 408,000 tec, France is Europe's second largest turkey producer after Germany (436,000 tec).

On the basis of 2009 final figures, turkey accounted for 23 per cent of France's poultry output, dominated (58%) by chicken production. Unlike chicken production, however, turkey farms are concentrated primarily in Brittany.

Another distinction is that while there are numerous quality schemes and appélations for chicken, no more than one per cent of turkey production has any premium quality accreditation. Some 83% of French turkey meat retail sales go through multiples, with the rest being handled by butchers and specialist outlets. Escalopes account for around half the retail volumes.

French production volumes have dropped by around 40 per cent since 2001, in the face of imports from Brazil in addition to competition with Germany and Poland.

While France remains a net turkey meat exporter for the time being, there has also been a significant drop in French turkey consumption from 370,000 tec in 2006 to 306,000 tec in 2009, with a modest recovery to 325,000 tec in 2010.

While domestic turkey meat production dropped by 7.5 per cent between 2008 and 2009, when chicken production marked a 1.4 per cent year on year lift, CIDEF also observes that 40 per cent of the chicken consumed in France were imports from lower cost countries. French imports of turkey meat are not rising dramatically, even though volumes are growing steadily.

The original industry agreement of 2005 was "...useful to ensure the transition..." to a larger EU market, where new member states such as Poland had scope to develop their output.

The positions have been reversed in 2010, CIDEF observes, and "...the industry must restructure to survive. Revitalising these structures requires a more closely monitored and technical approach to meet the requirements of changing delivery patterns."

The full document (in French) can be downloaded at: http://www.autoritedelaconcurrence.fr/pdf/avis/11a12.pdf