Abbatoirs and slaughter houses (rental valuation)
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This section applies to stand alone purpose built or adapted abattoirs used for the slaughter and or processing of animals into meat products.
Bulk Class – Industrial
Primary description code – MX
Description - Abattoir and premises
SCAT code 401 (rentals method)
SCAT code 400 (contractor’s basis)
SCAT suffix for abattoirs under 20,000m2 use G suffix, over 20,000m2 use S suffix.
3.1 The valuation and referencing of this class is governed by the size of the abattoir.
3.2 Abattoirs with a GIA of over 20,000m2 are the responsibility of the National Valuation Unit.
3.3 Those with a GIA of less than 20,000m2 will dealt with by the Regional Valuation Unit.
4.1 The specialist industrial class co-ordination team and the industrial valuation panel have responsibility for this class ensuring effective co-ordination across units. The team are responsible for the approach to and accuracy and consistency of abattoir valuations.
4.2 The team will deliver practice notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list.
4.3 Caseworkers have a responsibility to
- follow the advice given at all times
- not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team
5.1 Details of all current legislation, licencing requirements and food hygiene regulations governing meat handling establishments including slaughterhouses can be found on the Food Standards Agency website https://www.food.gov.uk/business-guidance.
5.2 The legal requirements covering the construction, layout and equipment of slaughterhouses include the Food Hygiene Regulations 852/2004, 853/2004, and The Welfare of Animals at the Time of Killing (England) Regulations 2015 (SI No. 1782). Similar legislation applies in Wales, Scotland and Northern Ireland.
5.3 The most recent regulatory change is The Mandatory Use of Closed Circuit Television in Slaughterhouses (England) Regulations (2018) SI 556.
5.4 Taken together these regulations brought significant changes, not only to slaughter premises but also processing plants including establishments dealing with reconstituted meat products and those processing ‘meat by-products’.
5.5 The compliance standards placed many premises outside the criteria for ‘approved’ status and many medium sized food-chain abattoirs closed rather than invest in the very substantial costs of upgrading and modernisation necessary for ‘approved’ status. Improvements required include the provision of air-conditioning and filtering systems, white-wall easy clean panels to walls, ceilings and special floor surfaces. Also required are sophisticated hand and boot washing facilities, and improved drainage and storage for waste products. Separate staff areas including dedicated rest and refreshment rooms have added to the costs, but in larger premises these improvements are more easily created and the costs more easily absorbed.
5.6 Exemption matters - the question of exemption/non-exemption from rating of certain buildings annexed to the main abattoir building and used for lairage purposes(on the grounds that they are agricultural buildings) has been a subject of dispute.
Schedule 5 paragraph 1 of the LGFA 1988 states that:
‘A hereditament is exempt to the extent that it consists of any of the following:-
a. agricultural land
b. agricultural buildings’
In order for a lairage building to qualify as an agricultural building it must satisfy 5 (1) (a) of the LGFA 1988, that is to say:
‘A building is an agricultural building if:
a. it is used for the keeping or breeding of livestock or, b. A building is not an agricultural building, by virtue of paragraph 5 (1)(a) ‘….unless it is surrounded by or contiguous to an area of agricultural land which amounts to not less than 2 hectares.’
5.7 Paragraph 5 (1) (a) has caused problems of interpretation. The principal issue is whether the expression ‘ …used for the keeping of livestock ….’ includes the holding of livestock prior to slaughter or alternatively means the rearing of livestock for the production of food or wool for sale (Para.8 (5)). There is no time period within the legislation to assist with the meaning of the word ‘keeping’, but an examination of the function of the lairage will be of assistance.
5.8 Lairage buildings provide pens for the temporary holding of livestock before slaughter. Temporary can mean overnight. The purpose of lairage pens is to regulate the flow of livestock through the slaughter hall and to allow the beasts to recover from long journeys by road in order to improve the quality of the meat after slaughter.
5.9 There are no elements of ‘rearing’ or ‘husbandry’ - which are considered to be the essential elements of ‘keeping’. Therefore lairage yards forming part of an abattoir or buildings should not be treated as exempt from rating.
5.10 The Upper Tribunal (Lands Chamber) (UT (LC)) decision in Cheale Meats Ltd v John Philip Ray (VO) [2012] clarified the position in that the UT concluded that the lairage buildings are not used for the ‘keeping’ of livestock within the meaning of paragraph 5(1) (a) of Schedule 5 and the buildings are accordingly not agricultural buildings within paragraph 1(b).
5.11 The abattoir in that case is used for the slaughter of clean pigs i.e. young pigs not used for the breeding process and sows having reached the end of their breeding life. As far as the clean pigs are concerned the UT determined that function of rearing has been completed when they are sent for slaughter. The care that they receive at the abattoir – resting and watering and, sometimes, feeding – is only made necessary by the fact that they have been transported. It plays no part of the rearing process and it would not be required to any significant extent if the abattoir was sited on the farm where the pigs had been reared.
5.12 As far as the sows were concerned, the UT (LC) determined that some, possibly most, of them need to be dried off to allow their teats to shrink, thus avoiding or reducing the trimming of the carcass. To that extent they are undergoing conditioning that is not attributable to the journey that they made from the farm. Nevertheless the Tribunal did not think that this means that they are being kept, within the meaning of the Act, at the abattoir. The time they spend there is short in contrast to the long-term nature of keeping and breeding livestock, and the purpose of the drying off is closely associated with the requirements of the slaughterer (to avoid or reduce the amount of carcass trimming) rather than their housing in the lairage constituting ‘keeping’ within the meaning of the Act.
5.13 The Tribunal added that if, contrary to the above view, the housing of the sows did amount to their ‘keeping’ for this purpose the buildings would still not be agricultural buildings. That is because under paragraph 5(2) (a) they would only qualify as such if their use was solely for the purpose of the keeping of livestock. The fact that not all the sows need to be dried off and the use of the buildings for the housing of clean pigs as well as sows were matters that are fatal to the contention that the buildings are exempt.
6.1 The basis of measurement is Gross Internal Area (GIA). Reference should be made to the Code of Measuring Practice 6th edition or its replacement for guidance.
6.2 Surveys should record details of the main structure(s), and care should be taken to take detailed note made of the use made of each section and any special finishes.
6.3 Adequate information regarding all items of plant and machinery should be recorded, including those frequently found including compressors, electrics, air conditioning, support steel work and effluent treatment. Details will be required not only to assess their effect on value, but also in the event of particulars being sought by the ratepayers or their agents under the relevant statutory provisions. Reference should also be made to Rating Manual: section 6 part 5 and the VOA Rating Cost Guide
7.1 Plans and surveys should be stored in the property folder of the Electronic Document Records Management (EDRM) system.
7.2 Rating surveys should be captured on the Rating Support Application (RSA).
7.3 The sublocation code 3ABT should be used nationally for those properties in excess of 20,000m2. It is recommended a sublocation code of ABT1 be used nationally for those properties smaller than 20,000m2.
8.1 This will be considered under the following heads
a. Basis of valuation
b. Overcapacity and non-standard operations
c. Exemption matters
8.2 Basis of valuation - The Cheale Meats Ltd UT (LC) decision referenced above clarified that abattoirs are sui generis and the basis of valuation must be by reference to the values of other similar abattoirs. However despite this, some support was given for the VO approach adopted in the case, which is based on industrial values in the locality. In the absence of rental or other evidence of abattoirs, valuing by reference to industrial values was regarded as ‘understandable’ according to the UT(LC) although only as a starting point - abattoirs should be valued as a sui generis use, and they are not in the same mode or category of occupation as an industrial building. Underlying the rebus sic stantibus rule relating to the mode or category of use is the recognition that the basis of value of the subject hereditament is that of the value to the occupier. This may be different from the rent that the hereditament might command if let in the open market for some other purpose.
8.3 The UT (LC) concluded that where rental or other evidence relating specifically to abattoirs is not available then for want of anything better, local industrial values will have to be taken as a starting point.
8.4 However, the Tribunal added that they did not need to use local industrial values because there was substantial evidence relating specifically to abattoirs in the form of comparable assessments. This will not be of assistance when undertaking a revaluation and settlement evidence is not available. That said, the factors the Tribunal considered to be important by reference to any appeal hereditament are as follows.
(i) Location including proximity to producers and markets, access and transport communications;
(ii) Size, age, condition layout and facilities.
8.5 Within this context the established practice has been to value these hereditaments on the local industrial tone suitably adjusted for finishes and quality. This category of specialist use requires an internal layout which distinguishes it from the simple layout of normal industrial property. Areas for lairage, slaughter, basic cutting and in many cases full processing/packaging to sale standards, require a compartment style layout of several differing grades. Detailed referencing is essential to attribute correct levels of value to each of these areas as part of the hereditament. This is achieved, for the purposes of consistency, by applying relativities within limited ranges, depending on the quality and finish, and guidance on this is set out below. The alternative approach of valuation by contractor’s basis presents problems as little or no recent reliable cost evidence is available.
8.6 Rental evidence for abattoir hereditaments is extremely limited and requires close scrutiny. Smaller, older premises are sometimes found to be rented but the landlord and the tenant may be connected parties.
8.7 Valuation relativities for the main component parts are, for consistency, recommended in the following ranges [consistent with the guidance in Cheale Meats]:
| Abattoir | 1.00 (older premises) | to 1.15 (modern units) |
| Cutting rooms | 1.15 (older premises) | to 1.25 (modern whitewall/ceiling / stainless steel and treated floors) |
| Chill rooms | 1.15 (all classes) | |
| Cold/freezer rooms | 1.3 (all classes) | |
| Offices | 1.1 (works quality) | to 1.2 (modern premises with office quality accommodation) |
| Lairage | 0.5 ( basic quality) | to 0.75 (modern full-height-wall animal pens) |
8.8 Over capacity and non-standard operations - In Cheale Meats the operation of slaughter premises was in part inconsistent with scale and size. In such specific cases where processing lines are ‘mothballed’ or underutilised regard should be had to the scale of the hereditament as a whole. A view should be taken as to the optimum use of premises in normal circumstances within the rating hypothesis. If clear evidence of surplus and imbalance can be seen as a long-term reality, an allowance to reflect the extent of these circumstances may be justified. This was the case in Cheale Meats. However such an allowance should not be granted without very careful consideration, and reference to NVU for guidance is required before this is agreed.
8.9 For the avoidance of doubt, small scale rural slaughter operations with a farm shop are typically outside these special cases, and as a rule and fall to be treated by reference to combining rural workshop levels and retail values for the shop. In this context local ‘rural workshop’ levels should underpin the slaughter and cutting areas, suitably adjusted for finishes.
8.10 Exemption matters - Lairage is not exempt and should be valued, as outlined in the legal framework in paragraphs 5.6-5.13 above. The UT concluded that the lairage buildings are not used for the ‘keeping’ of livestock within the meaning of paragraph 5(1)(a) of Schedule 5 LGFA 1988 and the buildings are accordingly not agricultural buildings within paragraph 1(b).
9.1 Support and guidance can be obtained from the national industrial specialist class co-ordination team within the National Valuation Unit.
9.2 Valuations are supported by the Rating Support Application (RSA), Survaid and Non Bulk Server (NBS) plant and machinery template.
1. Market appraisal
1.1 The number of abattoirs in England and Wales have continued to decline. Industry consolidation has resulted in large, modern, multi-function plants operating on a farm to table basis. Overall demand for meat and meat products is relatively constant and average throughput in abattoirs has increased.
1.2 There has been a significant decline in the number of smaller abattoirs in the past ten years as the consumer shift to the larger supermarket chains for meat-based goods continues and the number of independent high street butchers continues to fall. However, some small rural abattoirs remain successful in catering for more of a niche market than supermarkets provide.
1.3 Most chains have invested heavily in large plants and have increased their market share of meat sales. This has affected the balance of demand in favour of their own killing/processing plants.
1.4 Older abattoirs face high costs to comply with new regulations, and a number have closed.
1.5 The impact of the Covid pandemic on industrial property was marked by considerable variation between different sectors. Industrial values have generally increased during the pandemic, but movement of rental values for abattoirs will vary according to location and the type of buildings present.
2. Changes from the last practice note
There have been no changes since the last practice note. Valuations follow the pattern applied in assessing abattoirs for the previous rating list.
3. Ratepayer discussions
There have been no ratepayer discussions.
4. Valuation scheme
4.1 This scheme applies to abattoirs in England and Wales.
4.2 The basis of valuation is by rental comparison.
4.3 Rental evidence for abattoirs is limited. In the absence of such evidence reference should be made to industrial values of similar properties in the locality. The Rating Manual entry should be consulted for detailed guidance on valuation issues associated with abattoirs.
4.4 In accordance with the Upper Tribunal Lands Chamber (UT) decision in Cheale Meats Ltd v John Philip Ray (VO) [2012] abattoirs are valued as a sui generis use. They are not in the same mode or category of occupation as an industrial building. The UT confirmed where rental or other evidence relating specifically to abattoirs is not available, then local industrial values will have to be taken. They should, however, only be the starting point.
4.5 The factors influencing valued considered to be important by the UT are detailed below;
(i) Location including the proximity of the hereditament to the producers and the market, access and transport communications.
(ii) Size, age, condition, layout and facilities.
4.6 Lairage or holding pens are rateable. As referred to above the UT concluded that the lairage buildings are not used for the ‘keeping’ of livestock within the meaning of paragraph 5(1)(a) of Schedule 5 LGFA 1988 and the buildings are accordingly not exempt agricultural buildings within paragraph 1(b).
1. Market appraisal
The abattoir market is now relatively stable and the overcapacity in the industry experienced in the 2005 list is probably no longer applicable. There has been no fall-off in the demand for meat and meat products and meat production is relatively constant. The consumer shift to the larger supermarket chains for all manner of meat based goods continues.
Most chains have invested heavily in large, modern, multi-function plants operating on a farm-to-table basis. They have increased their market share of meat sales, which has affected the balance of demand in favour of their own killing/processing plants. The demise of the independent high street butcher who cannot compete in this market continues.
Older abattoirs have tended to suffer particularly where they face the costs of compliance with new regulations without the necessary investment. This has made the closure of some premises a more attractive option in these circumstances.
However some small rural abattoirs, despite these closures seem stable at present catering for more of a niche market than supermarkets provide.
2. Changes from the last practice note
The UT (LC) decision Cheale Meats Ltd v John Philip Ray (VO) clarified that abattoirs are sui generis and the basis of valuation must be by reference to the values of other similar abattoirs. However despite this, some support was given in the decision for the VO approach which is by reference to the industrial values of similar properties in the locality. In the absence of rental or other evidence of abattoirs, valuing by reference to industrial values was regarded as ‘understandable’ according to the UT (LC) although it is only a starting point. The effect upon the valuation scheme is outlined below and the revised Rating Manual entry should be consulted for detailed guidance on valuation issues associated with abattoirs.
Regarding the rateability of the lairage the VO’s position – that they are rateable on all counts - was confirmed to be correct. Detailed guidance on the lairage issues is to be found in the Rating Manual Section 5 Part 1.
3. Ratepayer discussions
There have been no discussions with ratepayers of industry representatives for 2017.
4. Valuation scheme
Sui generis basis
In accordance with the Cheale Meats decision abattoirs are valued as a sui generis use. They are not in the same mode or category of occupation as an industrial building. Underlying the rebus sic stantibus rule relating to the mode or category of use is the recognition that the correct valuation approach to the subject hereditament is that of ‘value to occupier’. This may be different from the rent that the hereditament might command if let in the open market ‘second hand‘or for some other purpose.
Under the 2005 / 2010 basis the scheme of valuation valued abattoirs by reference to local industrial values. The UT (LC) concluded that where rental or other evidence relating specifically to abattoirs is not available then for want of anything better, local industrial values will have to be taken. They should, however, only be the starting point.
The UT (LC) added that in the Cheale Meats case they did not need to use local industrial values because there was substantial evidence relating specifically to abattoirs in the form of comparable assessments. This may not be of assistance however when undertaking a revaluation or where settlement evidence is not available. However for guidance, the factors they considered to be important by reference to the appeal hereditament are as follows.
- Location: the proximity of the hereditament to the producers and the market; access and transport communications
- Size
- Age, condition and layout
- Facilities: the quality and breadth
Lairage
As referred to above the UT(LC) concluded that the lairage buildings are not used for the ‘keeping’ of livestock within the meaning of paragraph 5(1)(a) of Schedule 5 LGFA 1988 and the buildings are accordingly not exempt agricultural buildings within paragraph 1(b).
Detailed guidance on the interpretation of the legislation and conclusions drawn from Cheale Meats are to be found in the Rating Manual section 5 part 1.
1. Co-ordination
1.1 This is an Specialist Class. Responsibility for implementing the scheme as set out in this Practice note lies with the Valuer within Business Units as does responsibility for ensuring effective co-ordination.
1.2 For further information see Rating Manual -Section 6 part 3 : Section 5 PN 1 : 2005.
1.3 Special Category Code 401 should be adopted for hereditaments appropriate for rental valuations and (exceptionally) 400 for those valued on the contractor’s basis
1.4 The appropriate suffix letter is (S).
2. State of the industry
2.1 Appendix A provides a commentary on the current state of the industry. In addition, to appreciate the many historic problems of the industry, it is recommended that the Practice notes, published for the previous revaluation at 2005 are read.
3. Valuation guidance 2010
3.1 This will be considered under the following heads:
a. Basis of Valuation b. Overcapacity and non-standard operations c. Changes to Hygiene Regulations and the licensing system d. Exemption matters
3.2 a. Basis of valuation
Established practice has been to value these hereditaments on the local industrial tone suitably adjusted for finishes and quality. This category of specialist use requires an internal layout which distinguishes it from the simple layout of normal industrial property. Areas for lairage, slaughter, basic cutting and in many cases full processing/packaging to sale standards, require a compartment style layout of several differing grades. Detailed referencing is essential to attribute correct levels of value to each of these areas as part of the hereditament. This is achieved, for the purposes of consistency, by applying relativities within limited ranges, depending on the quality and finish, and these are set out below. The alternative approach, of valuation by contractor’s basis, presents problems, as little or no recent reliable cost evidence is available.
Rental evidence for abattoir hereditaments is extremely limited and requires close scrutiny. Smaller, older premises are sometimes found to be rented, by the owner, to the occupying company to which he is closely connected. A considerable variation has been found to exist in the course of amassing data for analysis.
It is agreed that, by their nature, this category is sui generis, as most premises are unsuited to any other use without offending the principle of rebus sic stantibus. There has, however, been a general acceptance of the rentals approach to valuation. This has been borne out by general settlements at the 2005 appeal stage, and the extremely limited use of the contractors approach for compilation of this and previous lists. Planning considerations, especially in certain locations, may affect the extent to which alternative uses can be considered. Small rural slaughterhouses, closely linked to the agricultural community, may not find support for an alternative, more general industrial use.
In terms of valuation, there are also consistency implications for considering the approach to stand-alone cutting plants, which since 1 January 2006, are subject to the same basic hygiene and regulation standards as abattoirs.
As the numbers of abattoirs has continued to fall, it has become less likely that a locality will have more than one for tonal comparison purposes. Values adopted will clearly depend upon the local market but will probably be underpinned by reference to the local industrial rental levels.
Valuation relativities for the main component parts are, for consistency, recommended in the following ranges:
Abattoir |
1.00 (older premises) |
to 1.15 (modern post 1980 units) |
Cutting rooms |
1.15 (older premises) |
to 1.25 (modern whitewall/ceiling and treated floors) |
Chill rooms |
1.3 (all classes) |
|
Cold/freezer rooms |
1.5 (all classes) |
|
Offices |
1.1 ( OWK quality) |
to 1.2 (modern premises with OFF quality accom.) |
Lairage* |
0.5 ( 'Atcost' style) |
to 0.75 (modern full-height-wall animal pens) |
( * see exemption section for circumstances and guidance as to treatment)
This property is valued using the non-bulk server. The manual can be accessed here.
3.3 b. Overcapacity and non-standard operations.
Certain cases have arisen where the operation of slaughter premises has been inconsistent with scale and size. In specific cases such as (for instance) where a retail butcher has a slaughter and processing unit at the rear of the shop, which may include lairage, and all are assessed together, special regard should be had to the scale of the hereditament as a whole. A view should be taken as to the optimum use of premises in normal circumstances within the rating hypothesis. If clear evidence of surplusage and imbalance can be seen as a long-term reality, an allowance to reflect the extent of these circumstances may be justified. However such an allowance should not be granted without very careful consideration and reference to CEO. For the avoidance of doubt, small scale rural slaughter operations with a farm shop are typically outside these special cases and as a rule, fall in line to combine retail values at an ‘overall’ price for the shop. Local ‘rural workshop’ levels should underpin the slaughter and cutting areas, suitably adjusted for finishes.
3.4 c. Changes to hygiene regulations and the licensing system
The Food Hygiene Regulations (England) came into force on 1 January 2006 and dramatically changed existing requirements within slaughter premises. Similar legislation was brought in, at the same time, for Wales, Scotland and Northern Ireland. The High/Low throughput classifications were removed and replaced by a single set of standards to warrant granting a slaughter licence. In addition, cutting and processing premises, not involved in slaughter, are licensed under the same criteria. The OTM (Over Thirty Months) system for BSE in cattle, was reviewed and replaced, in November 2005, by an approved testing scheme. This meant that BSE-free cattle over thirty months old were again allowed to enter the food chain. Cases of BSE confirmed in the UK have steadily declined, year-on-year from 611 in 2003 to just 67 in 2007, the last year for which figures are available. In all cases, food-chain slaughter premises continue to require a veterinary presence on all slaughter days.
The result of the new regulations and OTM review brought significant changes, not only to slaughter premises but also processing including establishments dealing with reconstituted meat products and those processing ‘meat by-products’. The regulations also apply to all retail and catering businesses.
The compliance standards placed many premises outside the criteria for ‘approved’ status and many medium sized food-chain abattoirs were forced to close rather than invest in the very substantial costs of upgrading and modernisation necessary for ‘approved’ status. Improvements required include the provision of air-conditioning and filtering systems, white-wall easy clean panels to walls, and ceilings and special floor surfaces. Also required, are sophisticated hand and boot washing facilities, and improved drainage and storage for waste products. Separate staff areas including dedicated rest and refreshment rooms all have added to the costs, but in larger premises these are more easily created and the costs more easily absorbed.
Those premises previously dealing exclusively with OTM cattle also found a much reduced level of activity and had to make the same decisions as to whether to invest in upgrading. More comment is included in the State of Industry report at Appendix A. In valuation terms, it has caused required accurate re-referencing of some abattoir premises to record the changes, many of which are value significant.
Full details of current meat hygiene regulations and other relevant information is available on the FSA website: www.foodstandards.gov.uk
3.5 d. Exemption matters
Agents have been claiming exemption from rating of certain buildings used for lairage purposes and forming part of the hereditament, on the grounds that they are agricultural buildings. These buildings are invariably annexed to the main abattoir building.
Schedule 5 paragraph 1 of the LGFA 1988, states that:-
‘A hereditament is exempt to the extent that it consists of any of the following :-
a. agricultural land; b. agricultural buildings’.
In order for a lairage building to qualify as an agricultural building it must satisfy 5 (1) (a) of the LGFA 1988, that is to say:
’ A building is an agricultural building if ——-
a. it is used for the keeping or breeding of livestock or, …….. b. A building is not an agricultural building, by virtue of paragraph 5 (1)(a)
‘….unless it is surrounded by or contiguous to an area of agricultural land which amounts to not less than 2 hectares.’
Paragraph 5 (1) (a) has caused problems of interpretation. The principal issue is whether the expression ‘ …used for the keeping of livestock ….’ includes the holding of livestock prior to slaughter or alternatively means the rearing of livestock for the production of food or wool for sale ( Para.8 ( 5) ). There is no time period within the legislation to assist with the meaning of the word ‘keeping’, but an examination of the function of the lairage may be of assistance:
Lairage buildings provide pens for the temporary holding of livestock before slaughter. Temporary can mean overnight.
Pens contained within the abattoir, which invariably function in the same way, are accepted by some agents as being rateable.
The purpose of lairage pens is to regulate the flow of livestock through the slaughter hall and to allow the beasts to recover from long journeys by road in order to improve the quality of the meat after slaughter.
There are no elements of rearing or husbandry which are considered to be the essential elements of ‘keeping’ and therefore lairage yards forming part of an abattoir or buildings should not be treated as exempt from rating.
State of the industry report relevant to reval 2010
The appendix to the 2005 Practice note describes in detail, the problems of the BSE restrictions, the 2001 Foot and Mouth outbreak and the incidence of Bovine TB.
In terms of commercial problems, it is apparent that, following the 2001 FMD outbreak, the culling of stock, and subsequent compensation scheme, did not fully meet expectations on restocking. In some areas, it is clear that farming diversification took place and funds were used to convert farm buildings into holiday cottages, rural workshops and other enterprises not directly connected with agriculture. This resulted in increased imports to boost a reduced level of home production.
A further, less extensive and briefer outbreak of FMD occurred in August 2007. This was combined with a notified outbreak of Blue Tongue Disease and stock movements nationally were severely controlled. The FMD outbreak was eradicated quickly and notified cases ceased within a matter of weeks. Blue tongue restrictions however, are still in force in some areas, requiring licences to move stock. This disease is a virus, affecting only ruminants, and is no risk to humans. It is controlled by vaccination, and vaccinated animals may be moved under licence, in and out of designated ‘Blue Tongue Protection Zones’ and this includes movement to slaughter. The disease is still present in the UK although numbers of cases are small.
Avian flu has also provided a further period of alarm in relation to poultry with cases occurring both in wild birds and in commercial poultry houses. It still occurs in small pockets with the latest outbreak confirmed eradicated as late as July 2008. It rarely affects humans, and the risk is extremely small. It does however require the slaughter of large numbers of potentially affected birds where the disease is detected within a farmed flock.
The general effects of these outbreaks have not caused serious disruption to the slaughter industry since the cessation of the 2001 FMD outbreak in 2002.. However significant polarisation of the industry has taken place in the intervening period to date. Many more medium sized abattoirs have closed and there are several factors involved:
- overcapacity in the industry, despite there being no fall-off in the demand for meat and meat products.
- increasing consumer shift to the larger supermarket chains for all manner of goods, where they are perceived as a one-stop-shop. Most chains have invested heavily in large, modern, multi-function plants operating on a farm-to-table basis. They have increased their market share of meat sales, which has affected the balance of demand in favour of their own killing/processing plants.
- demise of the independent high street butcher who as a result of 2. above cannot compete in the market.
- older abattoirs were sited close to residential locations and unable to expand, while at the same time, sitting on valuable sites, suitable for redevelopment. Public and environmentalist pressure has encouraged planning authorities to consider these sites, in many instances, as more appropriate for housing, or light industrial use. The costs of compliance with the new regulations has made the closure of some premises a more attractive option in these circumstances.
Despite these closures, there are, by contrast, a number of small rural abattoirs, supplying niche markets for quality butchery products, speciality pies/sausage and barbecue cuts to farm shops, gourmet outlets and the hotel and restaurant industries. Their market seems stable at present and justifies the required new investment, even though they may kill on a reduced basis and on certain days of the week only. Notably they still require the fixed overheads of a veterinary presence and inspection of all live animals prior to slaughter, both adding disproportionately to their product cost.
The overall picture up to AVD (1 April 2008) is fairly stable but the industry was still vulnerable. Much information on closures has only come to light following the ‘Empty Property Rate’ legislation effective from 1 April 2008, as prior to that date, any vacant slaughter premises were not liable to business rates and therefore, appeals were rarely submitted for vacant premises. As some of these closures occurred months and even years earlier, the transfer of demand is likely to have taken place shortly afterwards, and mainly in favour of the supermarket chains.