1. B RITISH P OULTRY C OUNCIL The Voice of the British Poultry Meat Sector John Reed – Chairman April 23, 2013

2. A BOUT BPC  Voluntary trade association representing British poultry companies and 90% of the British poultry meat industry  Chickens, turkeys, ducks and geese  Member of AVEC (Europe) and IPC (global)  Covers the entire poultry meat chain – primary breeding, hatching, rearing, slaughtering, primary and further processing  Works closely with associated trade bodies (NFU, BEIC, Red Tractor, BRC…)

3. BPC M EMBERS

4. S PECIES (M ILLIONS OF BIRDS / YEAR ) BPC (2012)

5. C HICK P LACEMENTS ( MILLIONS ) DEFRA (2013)

6. P OULTRYMEAT C ONSUMPTION BPC (2013)

7. C ONSUMPTION IN THE UK ( TONNES / YEAR ) DEFRA (2011)

8. L EADING B ROILERS P RODUCERS IN E UROPE

9. M ARKET O VERVIEW

10. Source: Kantar Worldpanel, 12w/e 17 th February 2013 T HE M ACRO E NVIRONMENT Total Grocery 12 w/e YoY% Change

11. The Squeezed Middle

12.  Less disposable income & increased pressure from the rising cost of living  This has resulted in a marked change in shopper behaviour which looks set to stay- the rise of the Discounters and the squeezed middle is just one impact  Consumers are clearly managing the impact of inflation by maintaining tighter control over their budgets, seeking out the best deals and selective down trading- by either visiting cheaper supermarkets or buying cheaper products. i.e. private label instead of branded.  Shoppers reduce the size of their main weekly shop and visit the supermarket more frequently throughout the week, smaller top up shops, reducing waste and allowing for tighter control over their budgets.  This has had a knock on effect on promotional mechanics- Price reduction is now favoured over Y for £X and multibuy deals

13. Beef £6.68 / kg Pork £5.08 / kg Lamb £8.67 / kg Chicken £4.22 / kg Source: Kantar Worldpanel, 52w/e 17 th February 2013 In the same way that savvy shoppers have been trading down into cheaper supermarkets and less expensive products we have also seen switching into chicken from other proteins. This is as a result of both price and perceived health benefits. H OW HAS THIS IMPACTED F RESH C HICKEN ?

14. £7.69 £7.09 £4.97 £10.46 £5.18 £11.72 £0.00£2.00£4.00£6.00£8.00£10.00£12.00£14.00 Fresh Chicken Breast Fillets Ave RSP Fresh Turkey Breast Fillets Ave RSP Fresh Minced Beef Ave RSP Fresh Lamb Chops Ave RSP Fresh Pork Chops Ave RSP Fresh Salmon Fillets Ave RSP As the most popular cut of chicken, breast meat is expensive when compared to other popular cuts of protein H OWEVER WHILST CHICKEN IS CHEAPEST OVERALL …

15. As a result we have seen a shift in the interaction between tiers and individual cuts within Fresh Primary Chicken. Consumers have been switching spend from Organic and Free Range chicken into Standard and Value. Source: Kantar Worldpanel, 52w/e 17 th February 2013 Whilst breast meat sales remain strong there is a clear decline in penetration as shoppers switch into dark meat (+9.8% Value YoY) in favour of its lower price. Whole Birds are also popular for their lower £/Kg, leftovers can also be used to produce second meals or sandwiches.

16. The rise of the Discounters has also been very evident in Fresh Chicken and they have been stealing spend from the Top 4…. Fresh Primary Chicken YoY% Change Source: Kantar Worldpanel, 12w/e 17 th February 2013 The retailers have placed real emphasis on their quality credentials whilst maintaining low prices. They also generally opt for TPR mechanics over Y for £X and multibuy.

17.  Expect to see increased switching from Red Meat into Chicken- particularly whole muscle  No evidence to suggest that there has been any impact on individual retailers but will consumers become less trusting of those involved?  In the 12 weeks ending 17 th February 2013 there was a 43% value reduction in frozen burger sales and a 13% value decline in frozen ready meals  Increase in the number of shoppers visiting butchers to purchase their fresh meat- It is likely that the scandal may impact value tiered products with consumers becoming unsure about the quality and source.  Tesco’s Value Fresh Chicken lines have decreased in value by 11% in the last 4 weeks YoY (w/e 17 th February 2013)  The NFU has launched a ‘Buy British’ campaign encouraging shoppers to look out for the Red Tractor logo  Tesco have also announced that from July they will be sourcing all of their Fresh Chicken from British farms- as part of this they will also be committing to a 2 year contract with their producers. W HAT IMPACT WILL THE HORSE MEAT SCANDAL HAVE ON F RESH C HICKEN ?

18. I NDUSTRY A DVANTAGE  Vertically integrated  Short supply chain  Concentrated into a few large companies  High level of control throughout the chain  Customer driven – no UK or EU subsidies  Small carbon footprint

19. I NDUSTRY PRIORITIES

20. Animal health Environment Animal welfare Food safety Human health & safety Affordability Recruitment Profitability Food security Sustainable intensification

21. F OOD S AFETY AND H YGIENE  Campylobacter ∞Leader of Joint Working Group with the FSA, NFU, BRC and Defra ∞Scientific research, biosecurity measures, on-going trials at farm and plant level  Meat inspection regime ∞Joint work with the FSA to replace visual inspections by microbiological testing

22. R ESPONSIBLE A NIMAL H USBANDRY  Antibiotic stewardship ∞Continuous review of usage in poultry flocks ∞Voluntary ban on the use of cephalosporins in poultry production  Welfare at slaughter ∞Implementation of the EU legislation on the Protection of Animals at the Time of Killing  UK Poultry Health & Welfare Group ∞BPC, BEIC, GFA, NFU, BVPA

23. C AREERS & S KILLS Goals - Attract, recruit, train, develop and retain quality people for the sector - - Demonstrate professionalism and skills - ∞Annual scholarships in partnership with Harper Adams College ∞Poultry apprenticeship ∞British Poultry Training Programme / Poultry Passport ∞Awareness & education program in schools

24. E CONOMIC & S OCIAL C ONTRIBUTION  35,000 direct employees + 35,000 indirect employees  2,500+ farms and 30 food production sites across the UK  Contribution to the economy: ∞farmgate value £2.25bn ∞retailer level £4.5bn ∞food service sector £2.5bn  On-going work to facilitate exports of breeding stock & poultry meat

25. S USTAINABLE F OOD S ECURITY  Responsible sourcing of feed ingredients such as soy or wheat  Environment-friendly policies and standards  Large scale farming to meet the demands of a growing population

26. THANK YOU FOR YOUR ATTENTION