European Commission THE FIFTH FRAMEWORK PROGRAMME 1998- 2002 QUALITY OF LIFE AND MANAGEMENT OF LIVING RESOURCES “Marketing Sustainable Agriculture: An analysis of the potential role of new food supply chains in sustainable rural development” SUS-CHAIN QLK5-CT-2002-01349 Macro-level analysis of food supply chain dynamics and diversity National report – UK By James Kirwan, Bill Slee, Bill Vorley SUS-CHAIN deliverable no. 8.2 Macro-level analysis of food supply chain dynamics and diversity UK SUS-CHAIN WP2 National Report (deliverable 8.2) James Kirwan (Countryside and Community Research Unit – University of Gloucestershire) Bill Slee (Countryside and Community Research Unit – University of Gloucestershire) Bill Vorley (International Institute for Environment and Development) Countryside and Community Research Unit 3 TABLE OF CONTENTS TABLE OF CONTENTS.......................................................................................... I 1 GENERAL DESCRIPTION OF FSCS IN THE UK- THE HISTORICAL PERSPECTIVE .........................1 1.1 Introduction.................................................................................................1 1.2 The industrial revolution and its impact on FSCs............................................1 1.3 The post Second World War settlement ........................................................2 1.4 Entry to the European Community ................................................................2 1.5 Conclusion..................................................................................................3 2 GENERAL CONFIGURATION OF FSCS IN THE UK..............................................................5 2.1 Agriculture ..................................................................................................5 2.2 Food and drink manufacturing ......................................................................7 2.3 Food and drink wholesaling..........................................................................8 2.4 Food and drink retailing ...............................................................................9 2.5 Non-residential catering .............................................................................10 2.6 Change in FSCs in the UK ..........................................................................11 3 OVERVIEW OF THE REGULATORY AND POLICY ENVIRONMENT AND INSTITUTIONAL SETTING IN THE UK. ........................................................................................................................13 4 SECTOR BY SECTOR SUMMARY OF FSCS IN THE UK......................................................17 4.1 The UK food chain in brief..........................................................................17 4.2 Fresh Produce: Fruits and Vegetables.........................................................19 4.2.1 Current structure of the UK Fresh Produce market ..............................19 4.2.2 Institutions and Chain Governance ......................................................23 4.2.3 Dynamic sectors re. sustainability.......................................................26 4.2.4 Traceability and assurance.................................................................27 4.2.5 Judgement of sustainability and transparency......................................27 4.2.6 Rural development implications ..........................................................27 4.2.7 Bottlenecks against sustainability .......................................................27 4.3 Potatoes...................................................................................................29 4.3.1 Structure and trends..........................................................................29 4.3.2 Institutions and Chain Governance ......................................................31 4.3.3 Dynamic areas ..................................................................................31 4.3.4 Judgement of sustainability and transparency......................................32 4.3.5 Rural development implications ..........................................................32 4.3.6 Bottlenecks against sustainability .......................................................32 4.4 Cereals.....................................................................................................33 4.4.1 Current structure of UK cereal sector .................................................33 4.4.2 Institutions and Chain Governance ......................................................35 4.4.3 Traceability and assurance.................................................................36 4.4.4 Dynamic areas--market.......................................................................37 4.4.5 Sustainability and transparency ..........................................................37 4.4.6 Rural development implications ..........................................................38 4.4.7 Bottlenecks against sustainability .......................................................38 4.5 Dairy ........................................................................................................39 4.5.1 Structure of the UK milk market .........................................................39 4.5.2 Institutions and Chain Governance ......................................................41 4.5.3 Areas of dynamism............................................................................44 4.5.4 Sustainability and transparency ..........................................................45 4.5.5 Rural development implications ..........................................................45 4.5.6 Bottlenecks against sustainability .......................................................45 i 4.6 Poultry......................................................................................................46 4.6.1 Current structure of the UK Broiler market ..........................................46 4.6.2 Chain institutions and governance.......................................................48 4.6.3 Areas of dynamism—sustainability/alternative production....................51 4.6.4 Rural development implications ..........................................................52 4.7 Eggs ........................................................................................................53 4.7.1 Current structure of the UK egg industry.............................................53 4.7.2 Chain institutions and governance.......................................................55 4.7.3 Areas of dynamism—sustainability/alternative production....................57 4.7.4 Sustainability and transparency ..........................................................57 4.7.5 Rural development implications ..........................................................57 4.7.6 Bottlenecks against sustainability .......................................................57 4.8 Pork .........................................................................................................58 4.8.1 Current structure of the UK pork industry............................................58 4.8.2 Institutions and chain governance .......................................................61 4.8.3 Areas of dynamism—sustainability/alternative production....................64 4.8.4 Sustainability and transparency ..........................................................64 4.8.5 Rural development implications ..........................................................64 4.9 Beef .........................................................................................................65 4.9.1 Current structure of the UK beef industry ............................................65 4.9.2 Institutions and chain governance .......................................................68 4.9.3 Sustainability and transparency ..........................................................70 4.9.4 Rural development implications ..........................................................70 4.9.5 Bottlenecks against sustainability .......................................................70 4.10 Sheepmeat ...............................................................................................71 4.10.1 Current structure of the UK sheep sector............................................71 4.10.2 Institutions and chain governance .......................................................73 4.10.3 Sustainability and transparency ..........................................................73 4.10.4 Rural development implications ..........................................................73 4.10.5 Bottlenecks against sustainability .......................................................73 4.11 Sugar .......................................................................................................74 4.11.1 Current structure of the UK sugar industry ..........................................74 4.11.2 Institutions and chain governance .......................................................74 4.11.3 Sustainability and transparency ..........................................................77 4.11.4 Dynamic areas ..................................................................................77 4.11.5 Rural development implications ..........................................................78 4.11.6 Bottlenecks against sustainability .......................................................78 4.12 Sea fish ....................................................................................................79 4.12.1 Current structure of the UK fishing