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Stock Market Report

It is a matter of some concern to Alan Craig that you can buy a pound of mince today for virtually the same price as he sold it when, as a schoolboy, he took his first job in a butcher’s shop in Perth in 1977.

Although he has long since hung up his butcher’s apron Mr Craig still takes more than a passing interest in the price of beef having spent all his working career in the meat industry - in fact he thinks of little else!

As chief executive of ANM Group, which plays a major role in Scotland's agricultural economy and is one of the most progressive farmer-owned agri-businesses in the UK, his interests have had to broaden.

ANM, which can be traced back to 1870 with the formation of the Aberdeen Cattle and Farm Produce Association Ltd, has diversified into the land market, non-agricultural auctions and the catering and hospitality industry and even has part ownership of a golf course.

However the Group remains committed to its core business of livestock marketing and meat processing which, says Mr Craig, has been the friend of successive Chancellors over recent decades without the appropriate credit for it.

“Last year I was talking to farmers about inflation and inflation within the meat and livestock industry. I researched it and found that from 1977 to 2007 there was 396% compound inflation but that in the meat and livestock it was only about 30% over the same 30 year period. In some cases there were everyday essentials like mince and stew which were almost exactly, penny for penny, the same price as they had been 30 years previously.

“However there is a certain degree of empathy from politicians and public at the moment and there was a survey done this year in which farmers were in the top five most respected professions in the UK and that has come as welcome news.

“It is a good time to get more messages out to the public about what farmers do and about the food industry. The general public have tended to know very little of how farming and food actually works.”

He said recent “excellent” television programmes featuring chefs like Hugh Fearnley-Whittingstall and Jamie Oliver had helped inform the public about the role of farmers.

“The views of these TV chefs have been taken on board by the public and, I think, have done a helluva lot more good than bad.

“As that type of television has moved from food back up the supply chain there has been some very good coverage of farming and how it is carried out.

“I think as these programmes evolve, the content and accuracy of what is being covered has become more real and relevant and far more balanced and accurate.”

However he points to genetics as a major problem which has to be overcome.

“We have the bargain hunting gene sown into our DNA and it is hard to kick. People haven’t stopped eating meat but they have started eating it in a different way. Basically they are eating more of the lower value cuts and less of the higher value cuts – the sirloins and the fillets.

“The paradox is that it puts the value of the lower cut up and the value of what could be considered luxury items come down.”

He said margins for processors and retailers were currently being seriously squeezed and after a slight price rise consumers were now once again finding bargain after bargain.

“They are perhaps paying a little bit more than they were a couple of years ago but in comparison to where they were 30 years ago they are paying hardly anything more.

“People still think a bit of meat is very expensive. They will walk along a wine aisle and pick up a bottle of wine at £5 without breaking step but will wring their hands over purchasing a piece of topside at the same price which will feed their family.

“That consumer gene for bargain hunting and wanting a deal is probably one of the biggest hurdles the food industry faces.

“We have an abundance of capacity in the food industry in this country, as do many countries in the developed world, and that capacity drives the competitive streak in the industry so consumers get a fantastic deal.

“I don’t see anything in the next five to ten years that is going to change that.”

Working at the heart of the meat and livestock industry Alan Craig expects to encounter hurdles whether it be BSE, foot and mouth, bluetongue disease or global recession.

“It is no different to a policeman having to deal with a murder every now and again. It is not everyday stuff but these things fall upon us even if we would prefer they didn’t.

“It would be nice to think that disease was under control and there were rules and regulations to prevent these things from ever happening again, but the fact is they do and will.

“You can ride out any storm - whether BSE or the tail of recession - but you have to have a low cost base to get you through those sorts of times and then when times do come good and gross margins are favourable then you are in a position where you can harvest.

“We have to have a low cost base and keep challenging it. Some of best forms of defence are attack so we are going out there and getting new business.”

He knows his business inside out having graduated from schoolboy butcher assistant to apprentice and then rising through the ranks.

“I seemed to have a natural affiliation to butchers’ shops; in fact I preferred them to sweetie shops for some reason.”

He left his job in the Coop to work for George Sinclair, a farmer in Perthshire who had diversified into catering, butchery and cash and carry.

He supplied Gleneagles Hotel and Perth prison at the same time and because of the diversity the enthusiastic young worker learned to deal with everything from steers and heifers to kangaroos.

“It was a great staging post. It was like an academy for a young guy going into the meat industry.”

He then joined FMC which was the largest farming cooperative in Europe at the time and opened up a brand new abattoir and boning plant in Perth and climbed the management ladder.

His career has taken him to Ireland and England and most recently he settled in Fife having worked for ABP.

He is currently looking for a plot in the North-east to build a new family home.

Mr Craig, who has just been elected president of the Scottish Association of Meat Wholesalers, believes ANM has great potential.

“I really want to build the business and give shareholder confidence and return. It is not going to be easy and it is going to be a long process but I am absolutely relishing the challenge.

“It is an absolutely fantastic business with a fantastic balance sheet and a great foundation and I really want to show we can build on this and demonstrate what we can do over the next 10 or 12 years.”