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Caterers seek alternatives as price of beef rockets

29 June 2006
Caterers seek alternatives as price of beef rockets

The story of how world events conspired to escalate the price of beef began on the grasslands of Brazil with an outbreak of foot-and-mouth disease (FMD) last October. It then moved to Argentina, where the country has imposed severe limits on exports to stabilise domestic prices.

Then, closer to home, the lifting of the EU ban on exports of British beef was announced in May. Meanwhile, Germany's preparations for the World Cup included snapping up any surplus beef that might still be available on the world market.

Nigel Tottman, managing director of catering butcher Nigel Fredericks, speaks for many when he says: "It's bananas, hyperinflation. I don't remember a time when events have combined to affect prices in this way."

The fact that beef output from UK slaughterhouses is also down doesn't help matters, says Tottman. And what slack there is in Argentinian exports seems to have been taken up by the large steakhouse chains in Germany. He reports a £7 per kg increase in the price of Scotch beef over the last three to four months.

Through the roof At catering butcher Aubrey Allen, managing director Peter Allen defines the problem from a supplier's perspective: "The pressures are all on the prime cuts, and that's where prices are going through the roof. Fillet steak prices have gone up by 25% in the past three months. That's what's affecting restaurateurs. The price of cuts for stewing, for instance, is probably unchanged."

As a result, lower-cost and public-sector catering have been affected much less than the premium sector. Purchasing consultant Partners in Purchasing reports average price rises for different beef cuts of 7% between April and June, which managing director Diana Spellman describes as a "huge increase for us". The Meat & Livestock Commission quotes a rise of 10% on the cut price since the lifting of the British export ban was announced.

Chefs scared off by beef prices have helped to stoke demand for other meat and fish, say suppliers. To compound the problem, some suggest that swine fever in Germany and Holland has led to a shortage of pork, and many still predict that avian flu outbreaks on the Continent will lead to higher poultry prices.

So what is a chef to do, faced with a spiralling shopping bill? Contract caterer Harbour & Jones manages 14 sites in London. Food director Mark Parfait says the increases in beef are starting to hit home. "One choice is to go from premium cuts to rib or topside," he says.

Parfait's preferred option is to offer customers a "today's market price" system, as many caterers already do with fish. "That gives you the flexibility to provide people with what they want," he says.

Andrew Keen, group executive chef at restaurant chain Ma Potter's, believes restaurant chains can resist many of these price rises. The 16-site operation uses a lot of beef, with an emphasis on grilled cuts. "This year, the price of beef on the hoof has gone up by around 25%," says Keen. "But that really shouldn't filter down to the cut price." After a couple of months of negotiations, Ma Potter's is switching supplier, he adds, and will keep any increases to 3-4%. "If I'd taken what the previous supplier said at face value, it might have been 15 or 20%."

Prices doubled But even Keen admits that, when it comes to fish, fresh salmon prices have "gone through the roof". In the wake of disease among Scottish farmed salmon, prices have doubled over the past year, he says.

Aubrey Allen has seen the move away from meat influencing other fish prices. Parfait also believes suppliers are leading a push towards frozen rather than fresh products.

But anyone hoping that protein prices will return to last year's levels may be disappointed. In the short term, the ongoing FMD outbreak in Brazil may mean that EU officials reduce imports still further. And Argentina's politicians seem as unwilling to lose possession of their beef as its footballers are of the ball.

Those who have seen similar market pressures in the past have other reasons for pessimism. Parfait says: "Once prices go up, suppliers tend not to drop them again. They use these types of ‘scare' as an excuse to keep them high." Some even suggest unscrupulous contract caterers are happy to pass on the same justifications, along with higher prices, to their own customers.

Others, such as Keen, point out that the price on seasonal fish such as mackerel needs to be renegotiated as catches rise and fall. The same approach, he says, can and should be used with fluctuations in meat prices.

Then again, there are those who urge buyers to keep any current rises in perspective. According to Allen, beef currently costs 20% more than it did a decade ago. Over the same period, he maintains, lamb prices have risen by just 10%, while poultry prices have hardly changed at all.

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