National Quality Policy Report: Sweden€¦ · 4.3.1.3 Salmonella regulations ... 4.3.2.3 The...

National Quality Policy Report:Sweden

Ruben Hoffmann and Hans Andersson

May 1997

Project „Quality Policy and Consumer Behaviour“FAIR-CT 95-0046

This study is part of the project

QUALITY POLICY AND CONSUMERBEHAVIOUR TOWARDS FRESH MEAT

Project coordinator:

Tilman BeckerInstitut für Agrarpolitik und Landwirtschaftliche Marktlehre,

University of Hohenheim

The study has been carried out with the financial support from the Commission of theEuropean Communities, Agriculture and Fisheries (FAIR) specific RTD programme,CT 95-0046, „Quality Policy and Consumer Behaviour“. It does not necessarily reflectits views and in no way anticipates the Commission’s future policy in this area. Thismanuscript presents only some of the results. Other studies can be downloaded fromhttp://www.uni-hohenheim.de/~apo420b/eu-research/euwelcome.htm

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1 Introduction ............................................................................................................ 1

1.1 Agricultural policy environment background ..................................................................................... 1

2 Industry structure and quality policy issues ....................................................... 6

2.1 Pork ...................................................................................................................................................... 62.1.1 Supply by source............................................................................................................................. 6

2.1.2 Production ...................................................................................................................................... 6

2.1.3 Meat industry ................................................................................................................................. 8

2.1.4 Retail level ....................................................................................................................................15

2.1.5 Trade.............................................................................................................................................16

2.1.6 Inter-relationships along the supply chain......................................................................................17

2.1.7 Consumer demand.........................................................................................................................21

2.1.8 Quality policy issues ......................................................................................................................24

2.2 Beef......................................................................................................................................................262.2.1 Supply by source............................................................................................................................26

2.2.2 Production .....................................................................................................................................27

2.2.3 Meat industry ................................................................................................................................29

2.2.4 Retail.............................................................................................................................................33

2.2.5 Trade.............................................................................................................................................33

2.2.6 Inter-relationship along the supply chain .......................................................................................34

2.2.7 Consumer demand.........................................................................................................................34


2.3 Chicken................................................................................................................................................352.3.1 Supply by source............................................................................................................................35

2.3.2 Production .....................................................................................................................................36

2.3.3 Meat industry ................................................................................................................................38

2.3.4 Retail.............................................................................................................................................39

2.3.5 Trade.............................................................................................................................................39

2.3.6 Inter-relationship along the supply chain .......................................................................................40

2.3.7 Consumer demand.........................................................................................................................41


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3 Institutional arrangements .................................................................................. 44

3.1 Government.........................................................................................................................................443.1.1 The Ministry of Agriculture...........................................................................................................44

3.1.2 The Swedish Board of Agriculture.................................................................................................44

3.1.3 The National Food Administration ................................................................................................45

3.1.4 The County Administration ...........................................................................................................46

3.1.5 The municipal government ............................................................................................................46

3.2 Non-government ..................................................................................................................................473.2.1 The producer co-operative organisation, the Scan group ................................................................47

3.2.2 The Swedish Meat Trade Association ............................................................................................48

3.2.3 Swedish Poultry Meat Association .................................................................................................49

3.2.4 Other organisations .......................................................................................................................49

3.2.4.1 Swedish Association for Livestock Breeding and Production ..................................................49

4 Quality Policy ....................................................................................................... 52

4.1 Overview of quality policy ..................................................................................................................52

4.2 Product standards ...............................................................................................................................554.2.1 Labelling requirements ..................................................................................................................55

4.2.2 Conformity ....................................................................................................................................56

4.2.2.1 Carcass classification .............................................................................................................564.2.2.2 Product standards of meat ......................................................................................................57

4.2.3 Origin............................................................................................................................................57

4.2.3.1 Voluntary labelling of origin ..................................................................................................574.2.3.2 Chicken from Kronfågel.........................................................................................................58

4.2.4 Residues ........................................................................................................................................58

4.2.5 Additives .......................................................................................................................................58

4.2.6 General food safety standards ........................................................................................................58

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4.3 Process standards ................................................................................................................................594.3.1 General Food Standards.................................................................................................................59

4.3.1.1 Food hygiene standards on premises handling food or food products ......................................594.3.1.2 Regulations specific for meat and meat products ....................................................................594.3.1.3 Salmonella regulations...........................................................................................................60

4.3.2 Agriculture ....................................................................................................................................61

4.3.2.1 Differences in regulations by the SBA and the EU legislation at farm level ............................614.3.2.2 Swedish Farmers’ Disease Control Program...........................................................................634.3.2.3 The Association for Poultry Disease Control ..........................................................................634.3.2.4 The Swedish Animal Health Service- Pork, beef and lamb .....................................................644.3.2.5 Recording programs in the red meat sector.............................................................................654.3.2.6 Protective/eradication programs .............................................................................................654.3.2.7 Eco Audit...............................................................................................................................664.3.2.8 Scan Avel- a co-operative company with breeding program for pigs.......................................674.3.2.9 Avels Poolen- the non co-operative breeding program for pigs ...............................................674.3.2.10 Beef breeding (Swedish Association for Livestock Breeding and Production) .......................684.3.2.11 The producer price- slaughter companies guide meat quality ................................................684.3.2.12 Scans Animal Welfare Program-The quality policy declaration of the co-operative...............694.3.2.13 Environmental and basic quality program- A quality program for pork, beef and lamb ......................................................................................704.3.2.14 BIS- A quality security scheme for pork and beef .................................................................714.3.2.15 Non co-operative quality security schemes at farm level- Swedham plus...............................724.3.2.16 ISO certification...................................................................................................................734.3.2.17 The Swedish Poultry Meat Associations Animal Welfare Program .......................................734.3.2.18 The Animal Welfare Program of Kronfågel..........................................................................754.3.2.19 Campolybacter Control Program ..........................................................................................75

4.3.3 Slaughtering/Processing ................................................................................................................76

4.3.3.1 ISO certification.....................................................................................................................764.3.3.2 EMAS....................................................................................................................................77

4.3.4 Retail.............................................................................................................................................77

4.3.4.1 Hemköp .................................................................................................................................774.3.4.2 ICA- Sunda Naturbeteskött ....................................................................................................77

4.4 Integrated standards ...........................................................................................................................784.4.1 KRAV/ekokött - An ecological quality assurance scheme for pork and beef ....................................78

5 Concluding remarks ............................................................................................ 84

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FIGURESFigure 1 Swedish agricultural policy prior to the 1990 reform. ........................................................................ 2Figure 2 The 1990 agricultural reform in Sweden............................................................................................ 4Figure 3 Average annual producer prices for pork, beef and chicken per kg slaughtered weight 1984-1995.

(1995 prices) ........................................................................................................................................... 5Figure 4 Geographic structure of the Swedish slaughter business....................................................................13Figure 5 Structure in the meat cutting industry, 1995 .....................................................................................15Figure 6 The inter-relationship of the Swedish pork and beef meat market .....................................................20Figure 7 Structure of the poultry production in 1996, number of producers & percent of total building area by

size of building area ...............................................................................................................................37Figure 8 Structure of the poultry production in 1996, kg/m2 density in percent of total barn area ....................37Figure 9 Historical development of wholesale prices per kilogram slaughtered carcass for selected meat

categories during the period 1976- 1995 (1995 price level).....................................................................41Figure 10 Quality Policy in Sweden................................................................................................................53

TABLESTable 1 PSE- and CSE measures for Sweden and the European Community for the period of 1979 - 1992. ..... 3Table 2 Trends in supply of pork by source, 1985-1996 in million kilograms*................................................. 6Table 3 Size distribution of pig breeding units in Sweden 1992 & 1995 (thousands)........................................ 7Table 4 Size distribution of pig fattening units in Sweden 1992* & 1995 (thousands)...................................... 8Table 5 Slaughtering production*.................................................................................................................... 9Table 6 Number of abattoirs and throughput after size of throughput, 1989 and 1995......................................11Table 7 Average result of the carcasses classification of the Swedish pork production, 1995* .........................12Table 8 Import and export of live pigs in Sweden, 1985-1994, heads. .............................................................16Table 9 Imports and exports of pork in Sweden, 1985-1996, million kilograms ..............................................16Table 10 Proportion of various beef, pork and meat products of total household food expenditures for meat in

1989.......................................................................................................................................................21Table 11 Annual per capita meat consumption in Sweden 1960 - 1995 (kg). ..................................................22Table 12 Fresh and frozen meat versus processed meat products such as ham, sausage and canned products etc.

The figures are measured in raw product equivalents per capita for the 1980 -1994 period. ....................22Table 13 Food for home cooking as a percentage of total per capita consumption estimated for 1989.............23Table 14 Trends in supply of beef by source, 1985-1996 in million kilograms*...............................................26Table 15 Size distribution of cattle in relation to herd size of dairy cows, 1990 & 1995 (‘000).........................27Table 16 Size distribution of cattle in relation to herd size of beef cows, 1990 & 1995 (‘000) .........................28Table 17 Total slaughter production * .............................................................................................................29Table 18 Number of abattoirs over time, total and EU approved ......................................................................29Table 19 Number of abattoirs and throughput in relation to size of throughput, 1989 and 1995 ......................30Table 20 EUROP classification of bovine carcasses 1995................................................................................31Table 21 Fat classification of bovine carcasses 1995 .......................................................................................32Table 22 Fat classification ..............................................................................................................................32Table 23 Import and export of live cattle in Sweden, 1985-1994, heads. .........................................................33Table 24 Imports and exports of beef (incl. veal) in Sweden, 1985-1996, million kilograms ...........................34Table 25 Trends in supply of poultry by source, 1985-1996 in million kilograms............................................35Table 26 Number of abattoirs and total throughput over time..........................................................................38Table 27 Abattoirs and throughput of chicken after size of throughput, 1995..................................................38Table 28 Import and export of live chicken in Sweden, 1985-1994, thousands................................................39Table 29 Imports and exports of poultry in Sweden, 1985-1996, million kilograms * .....................................40Table 30 The Scan group................................................................................................................................48Table 31 Regulating/supervising government authority at various levels of the food marketing chain. ............51Table 32 Examples of price premiums for different qualities of meat (May 1997) ............................................69Table 33 Swedish quality policy regulatory requirements above general EU regulations- general & specific for

pork, beef and chicken............................................................................................................................80Table 34 Pork and beef- Voluntary quality policy ...........................................................................................81Table 35 Chicken- Voluntary quality policy chicken.......................................................................................83Table 36 Annual per capita meat consumption in Sweden 1960 - 1995 (kg).Fehler! Textmarke nicht definiert.

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1 Introduction

Recent developments regarding the BSE-disease have renewed the focus and

interest on areas such as animal health and product quality in the food industry. Special

attention has been devoted to the beef industry. Ultimately, these developments are likely to

have an impact on the human consumption of a larger set of meat/meat products. The main

objective of this report is to provide an introductory background to some historical

developments in the Swedish beef, pig and poultry industry and to provide an overview of

some of the more pronounced features of the current industry. A major feature of the report

pertains to the developments of the quality policy in the meat industry. Quality policy is

perceived to consist of government intervention/regulation as well as industry enacted policies.

1.1 Agricultural policy environment background

An overview of the developments in the beef and pig industry requires some

information regarding the agricultural policy environment. During the last seven years Sweden

has been subjected to three major forms of agricultural policy. Prior to 1991 the Swedish

agricultural sector was rather heavily regulated and included both border protection and

consumer subsidies (Wahlström (1973)). The policy is briefly summarised in Figure 1 where

PP1-PW represent the border protection and the distance Z represent the consumer subsidy. In

this system the producers pay part of the export losses, through for example slaughter fees.

Hence, the producer price have adjusted to PP2 in such a manner that export losses (area

DEFG) equal domestically consumed quantity times the difference between border protection

price and producer price (area ABCD).(Bolin 1983)

2

Figure A Swedish agricultural policy prior to the 1990 reform.

PP

P

QQuantity

Price

Q

D

S

Z

P

B

E

F G

C D

A

PP

P*

Q*

C

W

1

2

D S

Source: Bolin (1983)

However, this policy was subject to a great deal of criticism as noted by Bolin

and Swedenborg (1992). A measure of the protection/support provided to the domestic food

sector is given by the PSE- and CSE-measures for the aggregate agricultural sector. The PSE-

measure is an estimate of the loss of agricultural income that would occur if all support

measures were removed. The CSE-measure provides an estimate of the increase in food prices

(at the primary sector level) that is attributable to the structure of agricultural policy. A brief

summary of the historical development of these measures is given in Table 1.

First of all, the former policy resulted in fairly high prices in the domestic food

markets compared to the EU. In addition, the Swedish government through the regulatory

associations incurred substantial export subsidies, especially for grain products but even for

pork where an excess supply appeared in the domestic market prior to 1990 (Swedish Farmers

Meat Marketing Association (SFMMA), 1996).

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Table A PSE- and CSE measures for Sweden and the European Community for theperiod of 1979 - 1992.

----------------------------------------------------------------------------------------------- Period 1979-86 1987 1988 1989 1990 1991 1992-----------------------------------------------------------------------------------------------PSE: Sweden 44 57 53 51 57 63 57 EU 37 49 46 41 46 49 47CSE: Sweden -37 -61 -55 -53 -61 -62 -57 EU -30 -46 -40 -34 -40 -42 -40-----------------------------------------------------------------------------------------------Source: Rabinowicz (1993)

Partly as a result of this criticism a reformed policy was introduced in the

Swedish parliament in the spring of 1990 (JOU 1989/90:25, 1990). The reformed policy was

instituted in 1991. The main feature of the 1991 policy was the abolishment of export subsidies

and a reduced level of border protection. Hence, in the event of excess supply in the Swedish

market exporters would only receive the world market price PW. The policy was constructed in

order to create a domestic market clearing price determined by the supply and demand

conditions in Sweden. By contrast, a variable levy was charged on imports ensuring that

agricultural products could only be imported at an effective border protected price PB

substantially exceeding the world market price. The new policy enacted in 1991 is described in

Figure 2. As a result of this asymmetry in policy provisions the domestic market is forced to

clear at a price PD. In general the objective was to set the variable levy in such a manner that

the border protected price PB just slightly exceeded the domestic market clearing price, PD.

According to studies conducted in the end of the 80's and the beginning of the 90's this policy

was expected to decrease producer prices of pork and beef with approximately 5- 9 %

(Jonasson, 1989) relative to the preceding policy.

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Figure B The 1990 agricultural reform in Sweden

Quantity

Price

D

P* = P

= Q

Variable

S

import levy

PB

PW

D

C

Q S

A significant political event occurred in Sweden during 1991. The performance

of the Swedish economy had gradually deteriorated during the 70's and the 80's as a result of

an expanding government sector, the oil crises and several devaluation’s of the Swedish

currency. During the period 1972-1991 the Swedish gross national product (GNP) displayed

an annual growth of 2.06% (Statistics Sweden, 1995). Simultaneously, the increasing

government debt load and budget deficit that during 1991 amounted to 43.7% and 4.2% of

GNP respectively, were causing upwards pressure on the expected rate of inflation and

nominal interest rates in financial markets. During one of the recurring financial crises the

Swedish cabinet announced the intention to apply for membership of the EU as early as in

1990. The formal application was submitted during 1991.

These political events had rather significant ramifications for the developments in

the primary and secondary stages of the food marketing chain. First of all, a gradual adjustment

of the Swedish agricultural policy towards the EU-regime was advocated and instigated. (See

e.g. Bolin & Rabinowicz, 1992 or Bolin and Swedenborg, 1992). As an example, import tariffs

on imported protein supplements were abandoned in order to reduce feed prices. Furthermore,

a system with direct income payments per hectare to cash crops was initiated and expanded to

enhance the similarity with the EU agricultural policy.

Historically the Swedish meat production has a traditionally been subjected to

extensive regulations. The regulations were instituted in order to promote self sufficiency and

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the producer prices have been used as an instrument to achieve this goal. An apparent effect of

the 1990 reform may be observed in Figure 3. As a result of the internal deregulation of the

Swedish market, producer prices for pork and beef continued to decrease in real terms.

Nevertheless, it is important to point out that the gradual decrease in real producer prices had

been observed for an extended period of time and can usually be observed in several developed

economies.

The application for the membership of the EU caused increasing pressure on the

competitiveness of the domestic food processing industry (Bolin and Swedenborg, 1992). The

increased competitive pressure has been quite noticeable for both pork and beef with an

accentuated drop in real producer prices during 1995 (Figure 3).

Figure C Average annual producer prices for pork, beef and chicken per kg slaughteredweight 1984-1995. (1995 prices)

0 ,00

5 ,00

10 ,00

15 ,00

20 ,00

25 ,00

30 ,00

35 ,00

40 ,00

1984 1986 1988 1990 1992 1994 1996

Year

SEK

per

kilo

gram

P igmeat

Beef

Chicken

Source: Swedish Farmers Meat Marketing Association (1996), Journal of Agricultural Economics (1994,1996), Fjäderfä (1995,1996) & Livsmedelsekonomiska samarbetsnämndens indexmeddelanden

6

2 Industry structure and quality policy issues

2.1 Pork

2.1.1 Supply by source

The Swedish application for membership of the EU in 1991 implied a return to a

more regulated agricultural policy, especially for grain and oilseeds. From 1991 the production

of pork has slowly but steadily increased. During the same period the consumption has

increased both in total and per capita volume. Since 1991 Sweden has been self-sufficient in

pork. Up until the year of 1992, the volume of imported pork exhibited a steady growth.

However, in general imported quantity has been rather marginal and since the mid eighties it

has ranged between 2-10% of total domestic consumption. In recent years the exports have

been of similar magnitude.

Table B Trends in supply of pork by source, 1985-1996 in million kilograms*

Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

Domestic 331,7 309,5 287,8 299,4 306,6 290,8 267,9 277,9 291,1 307,6 309,7 320,7

Import 6,0 6,9 13,2 15,1 15,3 16,3 20,7 23,1 14,6 15,3 29,2 29,7

Total supply 337,6 316,4 301,0 314,5 321,9 307,1 288,5 301,0 305,7 322,9 338,9 350,4

Exports 75,3 51,4 36,7 37,6 45,5 38,8 19,8 15,6 18,7 21,6 21,9 38,0

Supply in theSwedish market 262,4 265,0 264,3 276,9 276,4 268,3 268,7 285,4 287,0 301,4 317,0 312,4Self-sufficiency, % 132,7 123,8 112,9 112,6 116,1 111,8 100,3 97,8 100,7 102,4 97,7 102,7* 1996 figures provisional.Source: The Journal of Agricultural Economics (1996:1, 1994:11, 1995:4) & SFMMA (1996)

2.1.2 Production

The structure in the pig industry is characterised by a multitude of small

producers that have survived over time but with a dramatic structural shift of volume produced

towards the large scale producers. The general observable trends are similar for holdings with

breeding pigs and holdings with fattening pigs. The number of producers have decreased, with

approximately 20% between 1992 and 1995, but the total number of livestock has remained

relatively constant during the same period, with an increase of 1% and 5% for breeding pigs

and fattening pigs respectively. Hence, between 1992 and 1995, the average herd size has

increased with approximately 31% for breeding pigs and 23% for fattening pigs respectively

7

although the total number of livestock has changed only slightly. This development is partly

attributable to a rapid structural adjustment in Swedish agriculture. One category of specialised

producers choose to expand herd size in order to remain an economically rational production

unit. Yet another category of producers choose to decrease herd size, or exit the industry,

while to a larger extent relying on off-farm income. In 1990, only 45% of the agricultural firms

required a labour input equivalent to at least one full time farmer. Consequently, 55% of the

farms were to be considered part time farms. (Livsmedelsekonomiska samarbetsnämndens

jordbruksekonomiska grupp, 1992)

Approximately 12 % of the farmers produce more than 500 pigs for slaughter per

year. These producers deliver about 60% of the total domestic production. During 1995 the

large scale producers amounted to 1300 out of a total of 10750 pig producers. The number of

producers has decreased with about 25% during the 1990-1995 period (46% between 1985

and 1995) and only the number of producers with herd sizes of more than 500 pigs has

increased (Statistics Sweden (SCB), Yearbook of Agricultural Statistics, 1996).

Table C Size distribution of pig breeding units in Sweden 1992 & 1995 (thousands)

1992 1995

Herd sizeNo. of

holdingsNo. of

livestockNo. of

holdingsNo of

livestock1-49 8,6 114,3 6,6 86,950-99 1,0 65,9 0,9 63,9100 and over 0,3 52,9 0,4 94,2Total 9,9 233,1 8,0 245,0Average size of herd 23,6 pigs 30,8 pigsSource: Yearbook of Agricultural Statistics (1993 & 1996)

8

Table D Size distribution of pig fattening units in Sweden 1992* & 1995 (thousands)

1992 1992 1995 1995

Herd size**No. of

holdingsNo. of

livestockNo. of

holdingsNo. of

livestock1-99 8,2 181,6 6,3 144,1100-249 2,3 305,2 1,8 253,6250-499 1,4 438,6 1,4 418,9500-999 0,8 528,7 0,9 541,71000 and over 0,3 591,8 0,4 709,9Total 13,0 2045,9 10,8 2068,2Average size of herd 156,9 pigs 192,3 pigs* Data not available for previous years. ** The herd size intervals and no of holdings include breeding pigs, but thepresented number of livestock include only fattening pigs.Source: Yearbook of Agricultural Statistics (1993 & 1996)

2.1.3 Meat industry

Slaughtering in the Swedish meat industry is dominated by five independent co-

operative slaughter associations with 14 plants as of 1995.1 Together they form the Scan-

group that accounts for 78% of the slaughtered volume of pigs (Nilsson, SFMMA, 1996). The

remaining volume is handled by privately or investor owned slaughter companies of varying

size. Many of these companies are organised in the Swedish Meat Trade Association, SMTA

(Köttbranschens riksförbund).

Besides the co-operative industries, the main slaughtering companies of the

private or investor owned companies are SLP AB in Helsingborg, Skövde slakteri AB in

Skövde, Br Karlsson slakteri in Vara, Ugglarps slakteri AB in Trelleborg and AJ Dahlbergs

Slakteri AB in Brålanda. (Jonsson, P., SBA, 1997)

The market structure for pig slaughtering can be illustrated by different

concentration ratios2. The four firm concentration ratio is 81.1, i.e. the four largest firms have

81,1% of the market. Three of these firms are co-operative associations and one is a member

of the SMTA. According to the non-linear Herfindahl-Hirschman (see e.g. Shy, 1996) index

the concentration, for four firms, is 2583.3 The higher the number the higher concentration in

the market. 10 000 is the highest possible index referring to a situation when one firm controls

1 A fifteenth co-operative abattoir was closed during 1995.2 The concentration ratios refers to the market share of a specific meat although most of the firms slaughterboth pork and beef. The five cooperative associations constituting the SCAN group are treated as separatefirms.3 The Herfindahl- Hirschman index equals the sum of the market shares squared. If the four largest firms hadan equal market share of 20%, the HH index would be 1600.

9

the entire market. For comparison, if the four largest firms had an equal market share of 20%,

the HH index would be 1600. Consequently, HH index of over 2500, indicates a highly

concentrated market.

Table E Slaughtering production*

Year 1976 1980 1985 1990 1991 1992 1993 1994 1995

Production carcasses (‘000) 3852 4122 4238 3602 3339 3402 3627 3773 3743

tons (‘000) 290 315 329 289 266 276 289 306 309

* Slaughter at home excludedSource: Yearbook of Agricultural Statistics, Statistics Sweden.

The number of EU approved plants are constantly growing and in the beginning

of 1997 31 abattoirs were approved for trade within the EEA according to article 10, Directive

64/433/EEC. Out of the large scale slaughter companies, only one is not approved according

to the EU regulations as of April 1997 but will be during 1997. Of the small scale slaughter

companies, all were approved by the beginning of 1997 according to article 4 A-C of the

Council Directive 64/433/EEC and Directive 91/495/EEC. As can be observed in Table 6 the

largest number of abattoirs is found in the production interval of less than 1000 livestock per

year.

Table 6 Number of abattoirs over time, total and EU approved

Year 1991 1992 1993 1994 1995

No. of large scale abattoirs 28 28 25 24 25

No. of small scale abattoirs 1 19 21 37 39 39

EU approved large scale plants 2 12 12 12 13 21

Total no. of pork abattoirs 47 49 62 63 64

without beef production 4 5 8 8 81 Before Sweden became a member of the EU, only plants exporting to EU needed approval, typically the largescale abattoirs. As of the beginning of 1997, all small scale abattoirs were approved according to article 4 A-Cin the Council Directive 64/433/EEC and Directive 91/495/EEC. 2 According to article 10, Directive64/433/EEC. Before Sweden became a member of the EU, only the plants exporting to EU had to fulfil the EUregulations.Source: Statistics from NFA and Jonsson, P., SBA.

There are several reasons for the trend towards larger sized plants and enactment

of cost reducing strategies. The history of protective agricultural policy has, until the reform of

1990, deterred import competition and partly contributed towards conserving the domestic

10

industry structure. Another feature of the Swedish meat industry is a strong tradition of farmer

owned co-operative companies with a high level of concentration in the market. The situation

has gradually changed. Domestic competition has subjected the co-operative organisations to

enhanced competitive pressure to reduce costs. Changing government policies and the EU-

membership have contributed towards opening the Swedish markets. According to

Hermansson (1996) the cost of slaughtering cattle and pigs decreased with approximately 21%

in the 1989- 1995 period as a result of enacting cost cutting programs. Since economies of

scale are quite pronounced, at plant level the cost reducing programs typically favour a

strategy of concentrating slaughtering to fewer plants. (Hermansson, 1996) It is not possible to

examine the margins in the slaughter and process industry because parts of the industry is

rather diverse with few specialised actors and hence desegregated data is not available.

For the entire slaughter industry, the average plant throughput has decreased

since the number of really small scale slaughtering plants has increased. At the same time the

larger commercial plants appear to continue to expand production. The average throughput for

abattoirs decreased with almost 30% between 1989 and 1995. During the same period, the

average throughput in abattoirs slaughtering more than 1000 pigs per year increased with

almost 20%. Abattoirs slaughtering more than 100 000 pigs increased throughput by

approximately 37%.

The slaughter volume of the Scan group has, as a proportion of total, decreased

with approximately 2 percentage units since 1989 for both beef and pork. During the last

decade the co-operative fraction of the slaughter industry has experienced a considerable

structural change. Between 1985 and 1995 the number of slaughter plants decreased from 26

to 14. (Hermansson, 1996) The general trend is characterised by closing smaller production

units and increasing capacity at the larger plants. 1985 the average slaughtered volume per co-

operative slaughter company amounted to 120-130 thousand pigs. 1989 it had increased to

about 150 thousand pigs. 1995 the average slaughtered volume per plant amounted to more

than 300 thousand pigs. Given the decreasing number of larger abattoirs, an over capacity

exists within the industry. Within the co-operative slaughter industry the capacity utilisation is

estimated to approximately 80%. (Lexmon, SFMMA, 1997)

The members of SMTA have also experienced structural changes. Even though

the group as a whole has increased the market share of the total production, the number of

slaughter companies have decreased and the average slaughtered volume per plant has

increased. (Svensson, SFMMA, 1996)

11

Table F Number of abattoirs and throughput after size of throughput, 1989 and 1995

Heads per yearNo. of abattoirs1 Throughput,

cattle (‘000)Throughput,

%1989 1995 1989 1995 1989 1995

-100 2 (1) 13 (3) 0,1 0,4 0,0% 0,0%101-1000 6 (1) 19 (0) 2,4 8,3 0,1% 0,2%1001-10000 11 (4) 10 (1) 47,7 32,7 1,3% 0,9%10001-50000 9 (5) 8 (3) 273,4 223,2 7,3% 5,9%50001-100000 6 (2) 5 (1) 442,6 401,5 11,8% 10,7%100001-300000 10 (8) 5 (3) 2044,4 869,4 54,3% 23,2%300001-500000 1 (1) 3 (3) 423,4 1054,2 11,2% 28,1%>500000 1 (1) 1 (1) 530,8 1162,5 14,1% 31,0%Total 46 64 3765,0 3752,2 100% 100%Average plantthroughput, total 82 59in abattoirs >100 000 pigs 12 9 250 343 79,5% 82,3%1 The Scan group abattoirs within brackets. One of the Scan group plants was closed during 1995. In reality 12Scan group abattoirs slaughtering pigs in 1995. The three with less than 100 heads only sanitary slaughter.Source: Jonsson, H., Kontrollenheten, Swedish Board of Agriculture (1996)

The average carcass weight of pork has increased over time. In 1995 the average

weight was 82,5 kg, compared to 80,2 kg in 1990 and 79 kg in 1986. (Statistics Sweden,

Yearbook of Agricultural Statistics) In Sweden, classification of carcasses has been conducted

for commercial use since the 1930’s. A carcass classification system was legislated in 1941 and

as of 1942 the system was implemented. At the time the market was characterised by excess

demand. The objective of the law was to attempt to restore equilibrium in the market and to

destroy a flourishing black market. Swedish law states that all slaughtered livestock, except for

farm level slaughtering for personal use should be classified4. In reality this regulation implies

that more than 99% of the livestock is classified. (Jonsson, H., 1997)

4 According to EU legislation only slaughter plants, handling more than 75 livestock units per week areobliged to classify the carcasses, 1 livestock unit equals 1 cow or 5 pigs.

12

As in the EU, the carcasses in Sweden are graded according to the percentage of

lean meat in the carcasses. In Sweden, meat percentage in pig meat has been used in the

breeding work since the 1970’s and for commercial classification since 1984. The meat

percentage is derived through an equational relationship including two different fat measures,

both of which originate from the back of the pig, and a measure of the depth of the muscles as

shown in Table 7. Since the EU calculations of the meat percentage include head and ears,

which the Swedish system does not, the meat percentage according to the EU system will be

approximately 3,5% lower than in the Swedish classification system. Hence, the average meat

percentage in Swedish pigs of 60% as of 1995 would correspond to 56,5% according to the

new EU classification standard. (Jonsson, SBA, 1997)

Table G Average result of the carcasses classification of the Swedish pork production,1995*5

Thickness of back fat

Fat 1 Fat 2

Depth

of the muscle

Meat %

13,7 16,0 52,6 60,0

* Using the Hennessy Grading Probe, Fat 1 is measured just behind the last rib and Fat 2 is measured betweenthe third and fourth rib. The depth of the muscle is measured at the same place as Fat 2. The equation used tocalculate the meat % were in 1995: Meat%=65,10-0,2*Fat1-0,54*fat2+0,12*depth of the muscle. The equationhas been re-estimated according to the regulations of the EU (incl. head and ears) and the new equation are:Meat %=59,09-0,5*Fat1-0,353*Fat2+0,193* depth of the muscle.Source: Jonsson, H., Klasssificeringsverksamheten 1995, 1996, Jonsson, H., 1997, SFS 1956:413,SJVFS 1991:122.

In the EU pig meat can be classified either by the meat percentage or the meat

percentage could be translated into a EUROP system. Sweden will have adapted the EU

system by January 1998. For comparison, SBA has adjusted the meat percentage and

transformed the 1993 classification data into the EUROP system. This data reveals that during

1993 in Sweden, 84,6% of the pork carcasses were classified according to the grade E or

higher, i.e. the carcasses had a meat percentage of 55% or higher. The corresponding figure for

all the EU member states was 58%. However, a wide dispersion of the proportion of meat

graded E or higher can be observed within the EU, with 94,6% in Denmark, 54,5% in

Germany, 4,6% in Spain, 49,9% in Ireland and 85,3% in UK. (Jonsson, H., 1997)

5 In the 1996 classification the meat percentage was 60,1 (Fat 2 = 15,9, Fat 1 and depth of muscle as of 1995).

13

Figure D Geographic structure of the Swedish slaughter business

#

*

#

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#

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# #

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#

#

#

#

#

#

#

#

#

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#

#

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#

#

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#

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**

*

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*

* *

# Pork and/or Beef abattoirs, white sign for co-operative abattoirs, black for private or investor owned abattoirs.

* Chicken abattoirs

14

At the processing level it is not possible to distinguish between pork and beef.

Hence, the following observations adhere to both categories of meat. The market share of the

Scan group decreases in the subsequent stages of the meat processing chain. As of 1995 the

combined market shares of the co-operatively owned meat processing firms ranged from

31,5% to 38% depending upon the level of processing. (SFMMA, Annual report 1995, 1996).

The highest market share is achieved in the meat cutting industry. The non co-operative

members of Swedish Meat Trade Association (SMTA) have a market share of approximately

45% and 53,5% in the meat cutting industry and the subsequent processing stages,

respectively. Charklaget AB in Ängelholm, Köttcentralen i Helsingborg AB in Helsingborg,

Mårtensson Partiaffär in Johanneshov, Meat Master AB in Svalöv and KA Kött AB in

Johanneshov represent the largest meat cutting industries within the SMTA. (Sturesson,

SMTA, 1997) KF (the consumer co-operative wholesale and retail chain) has a market share of

approximately 6% in the meat cutting industry and approximately 15% in the subsequent

process industries. (Annual report 1995, SFMMA, 1996).

In the process industry the largest companies are Scan HB, the consumer co-

operative KF, Sardus, Lars Jönsson and Lithells with market shares between 5% and almost

30%. The market structure indicates a four firm concentration ratio of approximately 55, i.e.

the four largest firms have approximately 55% of the market. The Herfindahl-Hirschman index

shows a concentration ratio of approximately 2400 for the four largest firms. (Annual report

1995, SFMMA, 1996).

The market for frozen processed meat products consists of the consumer retail

market and of the food service industry market6. The largest companies in the consumer

market represent Scanfood, KF, Procordia, Svenska Nestlé and Dafgård. The four firm

concentration ratio is 87% and the Herfindahl- Hirschman index is 2095. In the food service

industry market, Scanfood and Samfood (both owned by the Scan group), Procordia, Svenska

Nestlé and Dafgård represent the largest companies. The market is characterised by a four firm

ratio of 59% and a Herfindahl- Hirschman index of 901. (Annual report 1995, SFMMA, 1996).

6 The food service industry market refers to large scale consumers i.e. restaurants, schools, cafeterias etc.

15

Figure E Structure in the meat cutting industry, 1995

Retail sale4%

Private orinvestor owned

companies52%

co-operatively owned meat

processing firms 38%

KF-consumer co-operative 6%

Producer

(of whichapprox. 45%

members of SMTA)

Source: SFMMA, Annual report 1995, 1996 & Sturesson, SMTA, 1997

2.1.4 Retail level

At the wholesale and retail level the Swedish food marketing chain is dominated

by three major wholesale/retail conglomerates. As of 1995 these conglomerates accounted for

a market share of approximately 67% of the retail convenience goods volume (Supermarket,

1996). The market share of these three company groups are respectively; ICA 34%, the

consumer co-operative KF 20% and the D-group 13%. A high level of concentration is further

reflected in the retail store structure. A total of 77% of the retail convenience goods volume

was marketed by supermarkets as of 1995 where so called hypermarkets accounted for no less

than 9.2% of the total convenience goods retail trade (Supermarket, 1996). The remaining

volume was handled by specialised retailers (6%), kiosks, ambulatory markets etc.

(Supermarket, 1996). Given a substantial concentration at the retail level it is difficult to obtain

desegregated information regarding the sales of meat and meat products. However, in terms of

meat and meat products these three large conglomerates have an even higher market share of

the food sales than that of the convenience goods. (Svensson, SFMMA) A plausible hypothesis

is that meat sales represent a higher proportion of total sales in supermarkets than it does in

convenient stores. It only remains to be observed that only a few specialised meat/meat

product stores exist. Typically, these stores are situated in larger urban areas such as

Stockholm, Malmö and Gothenburg, where they target their marketing activities towards a

consumer segment that favours high priced quality meat/meat products.

16

2.1.5 Trade

Trade of live pigs is rather marginal. The major share of exports of live pigs is

destined towards Germany and Taiwan. No major trading partner can be observed for imports

of live pigs. Presently, out of the imported volume of pork 55% originates from Denmark ,

12% from Finland and 8% from Germany. The remaining 25% originates from other countries.

Out of the exported volume of pork Italy, Finland and Germany accounts for 10-15% each,

France and Russia 8-9% each, Great Britain 7% and the remaining volume is destined to other

countries. (Lexmon, SFMMA, 1997)

Table H Import and export of live pigs in Sweden, 1985-1994, heads.

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994Import 45 32 332 1 319 20 51 0 41 96 117Export 218 337 363 355 630 258 200 300 746 339Source: Foreign Trade, Statistics Sweden

As a consequence of the reformed policy instituted in 1991 export subsidies were

abolished and the border protected price level was reduced. An apparent effect of the 1990

reform may be observed in Table 9 where the import and export volumes of pork and the

degree of self sufficiency are displayed. Swedish pork production was, due to the regulatory

system, characterised by excess supply until the beginning of the nineties. In Table 9 a

decreasing trend in pork exports can be observed up until 1995. In the years before the

deregulation, approximately 15% of the Swedish production was exported. During the

deregulated period 1991-1995 exports fell dramatically to about 5% of total domestic

production. In a short period of time the pig industry, with an existing structural excess supply

of 10 - 30%, adjusted to an internal market equilibrium. However, since Sweden became a

member of the EU, exports have increased drastically. In 1996, exported volume reached the

same level as prior to the 1991 reform.

Table I Imports and exports of pork in Sweden, 1985-1996, million kilograms

1985 1987 1989 1990 1991 1992 1993 1994 1995 1996Import 6,0 13,2 15,3 16,3 20,7 23,1 14,6 15,3 29,2 29,7Export 75,3 36,7 45,5 38,8 19,8 15,6 18,7 21,6 21,9 38Source: Journal of Agricultural Economics (1996:1, 1994:11, 1995:4) & SFMMA(1996)

17

2.1.6 Inter-relationships along the supply chain

The Swedish pork and beef meat industry is dominated by the farmer co-

operatives, the Scan group. The co-operatives accounts for between 75% and 80 % of the

production and slaughtering of pork and beef. SFMMA, which is referred to as the Scan

group, consist of five independent co-operative slaughter associations. Although these co-

operatives are members of the central organisation SFMMA they still operate as independent

economic organisations. Hence, there managerial and governance organisation structure is

independent of SFMMA, although policy decisions are made by the entire Scan group.

(Nilsson, 1996 & Svensson, 1997) The structure of the co-operative part of the market is

further described in section 3.2.

The Scan group consist of a breeding company (for pigs), slaughter companies,

meat cutting companies as well as number of different processing industries and in addition a

share interest in other fields. For some products the co-operatives control/have interest in the

supply chain up until the wholesale level (SFMMA, Annual report, 1995). The market share of

the Scan group decreases in the subsequent stages of the meat marketing chain. As of 1995 the

combined market shares of the co-operatively owned meat processing firms represented a

market share of 75-80% in the slaughter industry, 38% in the meat cutting industry and 31,5%

in the subsequent process industries. (SFMMA, Annual report 1995). Through the umbrella

organisation SFMMA the Scan-group conducts political lobbying activities, instigates research

through the Swedish Farmers Meat Research Institute (Köttforskningsinstitutet) , implements

advertising campaigns etc.

An inherent feature of the co-operative organisation is to distribute the profits as

well as allocate the losses across members. The co-operative slaughter companies are obliged

to accept all products that the farmer delivers, i.e. they have a so called reception obligation in

addition to existing formal legally binding contracts with individual farmers. More than 90% of

the farmers have formal contracts with the slaughter abattoirs, since the pay is slightly better

(Svensson, SFMMA). As a consequence of the reception obligation, any costs attributable to

surplus production are directly assumed by the co-operative instead of directly by the

individual member farmer. The reception obligation of the co-operative in combination with an

open membership access for new members (required by law if patronage refunds are to be used

in accordance with the tax rules) causes an increasing supply in the market relative to what

would be achieved in a situation with a few investor owned companies. Hence, assuming the

same cost structure, co-operatives are beneficial for consumers as in comparison with a highly

18

concentrated industry of investor owned firms. The reason is that the co-operatives supply the

consumers with a larger volume of goods to a lower price, relative to the investor owned

firms. (Bolin, 1996)

The Scan group is consequently highly vertically integrated from producers

through slaughtering, meat cutting and process industry. However, the market share decreases

drastically downstream the food chain as shown previously. Except for one retail chain, for

which Scan consumer packs most meat products, the retail grocery stores themselves pack a

considerable part of the cut meat sold to consumers. This constitutes a marketing problem for

the co-operative organisation in terms of the product brand, Scan.

Only 5-10% of the cut meat products are consumer packed and labelled with the

brand label Scan, by the Scan-group. When Scan does not consumer pack the products they

submit separate Scan brand labels to be attached by the retailers. In reality, another 15-20% of

the products are actually labelled with the Scan brand in the grocery stores. Since the labelling

constitutes an extra cost for the retailers, the remaining 70-80% of the meat is consumer

packed at the retail shops without specifically labelling the product Scan. (Svensson, SFMMA,

1996)

Many of the non co-operative suppliers are organised in the Swedish Meat Trade

Association (SMTA). As of the beginning of 1997, the organisation consisted of 21

independent slaughter companies, 60 meat cutting companies, 92 process companies and 9

other companies. SMTA then represented 23% of the slaughter industry, approximately 45%

of the meat cutting industry and 53,5% of the subsequent process companies. (Sturesson,

SMTA, 1997) Even though the interests of the members are represented by the industry

organisation SMTA there is no co-ordination of production decisions between the member

companies. The slaughter companies to various degree use contracting provisions, larger firms

to a larger degree. The trend among the private or investor owned meat industry is towards a

higher level of integration at company level. During the last years slaughter companies and

meat cutting industry, and in some cases even subsequent process levels, have merged into one

company. However, the plants have remained as separate production units. (Rutegård, SMTA,

1996)

19

The co-operation between different companies at same level of the meat supply

chain deserves to be mentioned. This form of horizontal integration is manifested in different

organisations that for example focus on animal health (e.g. The Swedish Animal Health

Service), voluntary testing and quarantine restrictions on imported live animals (e.g. Swedish

Animal Farmers Protective Infection Control) etc. These organisations are discussed in the

quality policy section.

20

Figure F The inter-relationship of the Swedish pork and beef meat market

PRODUCTION Co-operative farmers

77% 23%

SLAUGHTER Scan COMPANIES slaughterers

38% 2% 37% 2% 21% (23%)

MEAT CUTTING Scan INDUSTRY

meat cutting industry

31% 7% 58% (45%) PROCESSING

Scan INDUSTRY process industry

31% 65% (50%)

RETAIL & WHOLESALE LEVEL ETC.***

ICA KF D-group Other:

34% 20% 13% 33%

- Restaurants & cafeterias **

- Retailers & wholesalers

(other than ICA, KF, D-group)

- kiosks, ambulatory markets etc.

Source: SFMMA, SMTA, Figure developed by the authors

% between the levels is approximated proportion of total domestic quantity (SMTA within parenthesis)* Private meat cutting (6%) and processing industry (15%) include the consumer co-operative companies (KF)** Includes lunch restaurants, hospitals, schools etc.*** Percentage is market share of daily purchased goods

Swedish Farmers Meat Marketing Association Swedish Meat Trading Association

Non cooperativefarmers

Private slaughtercompanies

Private meatcutting industry*

Private processindustry*

21

2.1.7 Consumer demand

The most recent survey of Swedish consumption patterns according to the

Family Expenditure Survey, 1992 (Statistics Sweden, 1994) indicates that the households

allocated 20.0% of the aggregate household disposal income to food expenditures. The

aggregate household disposable income is defined as the sum of wage income, net profit

business income, interest and dividends, capital gains and various forms of subsidies and

income transfers. Negative transfers and taxes are deducted from the previous sum. Out of the

total food expenditures 4.1% originate from home produced food such as for example

vegetables and home grown potatoes. 15.2 % of the total food expenditures refer to meals-

away-from home.

However, the most recent survey provides no guidance as to the importance of

fresh beef and pork and processed meat products in the consumer's budget set. An analysis of

the Family Food Expenditure Survey 1989 (Statistics Sweden, 1992) reveals that meat and

processed meat products accounted for 16.5% of the total household food expenditures in

1989 excluding meals-away-from-home. A detailed analysis is presented in Table 10. One of

the more noticeable observations from Table 10 is that a remarkably low proportion of meat

expenditures is allocated to poultry. This observation is also reflected in the subsequent

statistics regarding per capita poultry consumption.

Table J Proportion of various beef, pork and meat products of total household foodexpenditures for meat in 1989.

---------------------------------------------------------------------------Poultry 6.5Pork 32.7Beef and ground beef 21.1Sausages 14.8Sandwich items 7.1Other items 7.8Sum: 100--------------------------------------------------------------------------Source: Statistics Sweden (1992)

An examination of Swedish consumption of beef, pork and other meat do not

reveal any drastic changes over time. It is important to recognise that a special feature of the

Swedish consumption patterns is a comparatively low consumption of lamb and poultry and a

high consumption of pork. This fact is displayed in Table 11.

22

Table K Annual per capita meat consumption in Sweden 1960 - 1995 (kg).

1960 1970 1980 1985 1990 1991 1992 1993 1994 1995Pork 22,9 26,4 33,7 29,9 30,2 31 32,7 33,1 34,4 35,3Beef 15 16,3 16,8 14,9 16,3 16,4 16,2 16,7 17,2 18,2Veal 3,5 2 1,2 1,1 0,7 0,6 0,5 0,5 0,6 0,5Horse 1,9 0,9 0,4 0,3 0,4 0,4 0,3 0,4 0,4 0,3Muttonand lamb 0,2 0,5 0,6 0,7 0,8 0,8 0,7 0,7 0,7 0,8Poultry † 1,6 3,3 4,9 5,3 5,9 6,6 7,1 7,5 8,2 8,6† JEM 1997:7/8, 1990:11, 1983:7/8. According to A. Carlström at the Swedish Poultry Meat Association,approximately 1 kilogram consists of poultry other than chicken.Source: SFMMA (1996), Journal of Agricultural Economics (1997:7/8, 1990:11, 1983:7/8), Carlström (1997)

When long run per capita consumption patterns are examined it appears as if beef

consumption is rather stable but the consumption of pork exhibits a trend wise increase.

Similarly, consumption of veal and horse meat has decreased since the beginning of the 1950's.

As indicated by consumption figures in Table 11 a trend wise increase in the consumption of

poultry can be observed.

Another striking feature of the Swedish market for meat is that the proportion

between fresh and frozen meat versus processed meat products remains quite constant over an

extended period as demonstrated in Table 12. It is actually the case that the importance of

processed products appear to slightly decrease over time.

Table L Fresh and frozen meat versus processed meat products such as ham, sausageand canned products etc. The figures are measured in raw product equivalents percapita for the 1980 -1994 period.

----------------------------------------------------------------------------1980 1985 1990 1994

----------------------------------------------------------------------------Fresh and 27.1 24.6 26.8 30.6frozenProcessed 24.7 21.4 21.6 21.9products----------------------------------------------------------------------------Source: Swedish Board of Agriculture (1996)

An analysis of the distribution of pork and beef consumed as food-away-from-

home in cafeterias, restaurants etc. and food for home cooking, displays a rather stable

picture. A proportion of 60-70 % of all of the major meat categories apart from poultry appear

23

to be prepared in the private homes. However, due to the vast uncertainty surrounding the

assumed parameter values for computing these estimates the resulting figures should be

regarded with excessive caution. Besides, Statistics Sweden (1992) acknowledge that reported

estimates of household purchases of food items most likely underestimate the actual purchases.

Industry representatives (Nykvist, SFMMA, 1997) estimate that approximately 80 % of the

total volume of meat is cooked and consumed by individual households in various forms of

fresh and processed products. The remaining volume is channelled through the food service

industry market. The explanations to the observed differences still remain unclear and may

serve as an interesting area for further research.

Table M Food for home cooking as a percentage of total per capita consumptionestimated for 1989.

Pork Beef----------------------------------------------------------------------Home cooking 61.5 67.1-----------------------------------------------------------------------Source: Own calculations from Statistics Sweden (1992) and SFMMA (1996)

Rather few (published) studies exist where the impact of various socio-economic

factors upon meat consumption are evaluated. However, Statistics Sweden (1992) provides

some guidance. The study reports results from a nation wide survey of a total of approximately

2000 individuals being members of a specific household in 1989. The general picture from the

survey appears to be that no major differences in -per capita consumption can be observed

depending upon professional occupation with one exception. Farmers displayed a much higher

consumption of pork than other categories. In addition households falling in the category of

45-64 years of age were characterised by a higher level of pork and beef consumption than

households with members less than 44 years of age. This tendency could also be observed for

single person households.

The potential benefits associated with product differentiation of

ecologically produced beef and pork were examined by Holm and Drake (1989). The average

willingness to pay for meat produced in systems with more pronounced emphasis on animal

welfare and ethics considerations was estimated to 10% in addition to the price for

conventional products. The willingness to pay was found to be positively correlated with

income, age and degree of urbanisation. Irrespective of these findings, the major result of the

24

study was that 64 % of the respondents ranked price a the most important product attribute

while 30% considered taste to be the most important factor.

2.1.8 Quality policy issues

In this section, a brief review of some major quality issues is conducted. First of

all, keep in mind that there exists no powerful influential consumer organisations in Sweden.

Accordingly, the changes in quality policy traditionally originate from actions taken by the

media and/or politicians and/or the producers.

Since the 1950’s the participation rate of women in the work force has increased

substantially. Hence, demand for convenient food and, partly as a consequence of the increase

of the larger volume of pre-packed food, demand for improved information increased. During

the 1960’s the quality policy issues mainly concerned human safety and to lesser extent human

health and meat quality. The main quality issues concerned food contents and the risks

associated with the use of herbicides, pesticides, mercury and other residual substances. The

debate that continued during the 1970’s largely focused on colouring and additives. Another

major issue concerned the absolute level of food prices which became one of the main topics of

consumer advocates during the first half of the 1970’s characterised by an economic recession.

Two effects can be traced; the government started to subsidise food and the producers lost

some of the incentives to enhance quality. During the latter half of the decade the economy

improved, consumer disposable income grew and a tendency towards convenient and quickly

prepared food could be observed. On the contrary restaurants and cafeterias became more

quality conscious. During this period media turned their focus away from prices to quality.

Imports of food increased along with the emergence of new food cultures. In the late 1970’s

locally produced, natural, fresh and Swedish became quality attributes. (Ekman & Ekman,

1995)

The 1980’s may be characterised as an intense decade with a multitude of diverse

issues appearing on the agenda. Governmental regulatory changes were mostly targeted

towards animal welfare. It ought to be mentioned that the concept of animal welfare is wider

than animal health. Animal welfare include the clinically observed aspects of animal health but

the concept also embraces ethical issues regarding animal keeping and animal behaviour that

address the subjective psychological aspects of the well-being of the domesticated animals.

One of the major quality issues that emerged during the eighties was the debate

regarding the use of meat and bone meal from carcasses in feed. It was locally debated in 1981

25

but not until the end of 1985 it became a nation wide issue. The reasons for the debate in the

radio and television media were mainly ethical concerns regarding feeding ruminants with

ruminant carcasses. Iin the tabloid press the issue was related to the fact that cats and dogs

were used as ingredients in the feed. The debate resulted in a governmental regulation

prohibiting cadavers in feed for animal production meant for human consumption as well as for

cats and dogs. (Larsson, A., 1997; Berglund & Gulbrandsen, 1997; Widell, 1997)

The quality debate created an increased awareness among meat producers of the

importance of supplying high quality food subject to the trust of the consumers. Partly as a

result of this debate, the co-operative organisation, the Scan group, created a quality program

largely based on animal welfare/care. This program formed the basis for expanding quality

programs. (Scan, 1995. Omsorg i djurskötseln 1995- årsrapport) In the aftermath of the

debate, the producers 1987 voluntary decided to exclude all meat and bone meal in the feed to

ruminants. (SFMMA, 1996)

A lot of individuals were involved in the debate, mainly concerning animal

welfare issues, during the 1980’s. One of the most well known and influential is a famous

Swedish author of children’s stories. Astrid Lindgren was and remains an active advocate for

improved animal welfare. Improved animal care was, as often was the case, in the ongoing

debate defined as traditional or historical managerial practices. In 1987 Astrid Lindgren

celebrated her 80 year birthday. As a gift from the Swedish government, the prime minister

Ingvar Carlsson presented a draft for a new animal protection law (adopted 1988). According

to most producers and politicians the law improved animal welfare. Astrid Lindgren claims that

it failed to address the most important issues. (Some of the features of the law are presented in

quality policy section) (Lindgren & Forslund, 1990 and Ekman & Ekman, 1995)

Since the 1990’s the debate has focused on animal welfare and the membership

of the EU. In 1995 Sweden joined the EU. The deregulation and the membership of the EU

was expected to cause enhanced competition and a loss of market share in the domestic

market. Imports have increased during 1995-1996, but imports still account for a relatively

small fraction of total domestic consumption. According to consumer surveys conducted in

Sweden 1992, 1993 and 1995 a majority of the consumers perceive domestically produced

food as being somewhat or much better than imported. Between the years of 1992 and 1993 a

slight improvement for domestically produced food can be detected. However, between 1993

and 1995 no changes in consumer attitudes can be detected (SOU 1996:62 &

Konsumentberedningen 1996). Nevertheless, it seems reasonable to conclude that the media

26

reports the last years concerning BSE, transport and housing conditions within the EU and the

uncertainty of the origin/production technology in imported products (antibiotics, hormones

etc.) and so forth may have contributed to maintain a rather low level of imported meat.

In the public debate regarding the need for improved animal care it was

advocated that Sweden should be positioned in the frontier in order to serve as a good example

with stringent regulations. In response to this debate some changes were initiated from the

retail level. In 1993, one of the larger chains of supermarkets, Hemköp, began to advertise their

products as solely Swedish. In contrast, some other major Swedish retailers aim at reducing the

price of Swedish meat since they perceive the price level as being higher than in the rest of

Europe. Hence, these retailers have started to import meat, mainly beef from Ireland and pork

from Denmark.

Quality issues relating to animal health have, apart from the animal welfare

aspects, generally not an important public issue. However, animal diseases have been discussed

in connection to human health and safety. The debate has concerned e.g. BSE, Salmonella and

e-coli. (Svensson, 1997) For economic reasons, the industry itself naturally has focused on

animal health issues. The Swedish Animal Health Service, which is described more thoroughly

in section 3.2, is an organisation that works together with the farmers and the government to

promote animal health. For example The Swedish Animal Health Service is in charge of a

program with the objective of eradicating Aujesky’s disease.

2.2 Beef


In contrast to pork production, the domestic beef industry has not been self

sufficient in recent years. The last decade, the imported quantity of beef as a proportion of

domestic consumption has ranged between 5-20%. The imported quantity is increasing. In

1996 imports amounted to 23% of the domestic consumption and 28% of domestic

production. Exports have been rather stable during the recent years. Obviously, the beef

industry is more severely exposed to import competition than the pork industry.

Table N Trends in supply of beef by source, 1985-1996 in million kilograms*

Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

27

Domestic 157,7 147,4 135,0 127,5 138,7 145,3 137,1 130,1 141,7 142,4 143,4 137,1

Import 7,0 7,6 16,1 19,5 14,0 12,5 19,2 25,9 20,7 23,7 27,0 39,0

Total Supply 164,7 155,0 151,1 147,0 152,8 157,7 156,3 156,0 162,3 166,2 170,4 176,1

Exports 32,8 21,2 7,2 4,9 7,2 11,8 10,8 7,3 11,2 8,0 6,0 8,0Supply in theSwedish market 132,0 133,9 143,9 142,1 145,5 145,9 145,5 148,7 151,1 158,2 164,4 168,1Self-sufficiency, % 127,2 115,2 98,5 94,4 102,8 103,8 96,5 92,3 97,0 90,9 87,4 81,6* 1996 figures provisional.Source: The Journal of Agricultural Economics (1996:1, 1994:11, 1995:4) & SFMMA (1996)

2.2.2 Production

The structure of the beef industry displays a similar development as for pork.

Beef production, as well as pig production, is characterised by a multitude of small producers.

Similar to pig production, a trend towards a decrease in the number of small units can be

observed. In contrast to the pig industry however, a major proportion of the quantity supplied

still originates from the very small production units. There has been a shift in volume produced

from smaller to larger farmers. For dairy herds, 18% of the livestock were found in herds with

at least 50 dairy cows in 1990. However, in 1995 27% of the livestock was found in this size

category. While the total number of dairy cows has decreased with more than 15%, the number

of cows in herds with more than 50 cows has increased with almost 24%.

For beef cow herds, the proportion of beef cows in herds with 50 beef cows or

more, has increased slightly from 10% to 12% between 1990 and 1995. Even more interesting

is the fact that the total number of beef cows have more than doubled in just five years and the

average herd size has increased by a third. From the tables below it can also be inferred that

most of the beef cows are found in specialised farms. Only 6% of the beef cows were kept at

farms with joint dairy production during 1995 (compared to approximately 11% in 1990). It is

evident that the major part of the beef produced emanates from dairy production. Out of the

total number of cattle besides cows, 70% could be found at farms without beef cows in 1990

(62% in 1995).

Table O Size distribution of cattle in relation to herd size of dairy cows, 1990 & 1995(‘000)

Herd sizeNo. of

holdingsNo. of

beef cowsNo. of

dairy cowsNo. of cattle

other than cowsof dairy cows 1990 1995 1990 1995 1990 1995 1990 1995

28

0 70,6 69,6 66,7 148,3 0,0 0,0 358,9 461,21-19 13,2 7,1 2,5 3,3 143 84 165 11820-49 11,3 8,8 3,6 3,8 329 268 402 37850 and over 1,5 1,8 1,8 1,8 105 130 141 181Totalwith dairy cows 25,9 17,7 8,0 8,8 577 482 709 677Average herd size with dairy cows 0,3 0,5 22,2 27,2 27,4 38,1Source: Statistics Sweden

Table P Size distribution of cattle in relation to herd size of beef cows, 1990 & 1995(‘000)

Herd sizeNo. of

holdingsNo. of

beef cowsNo. of

dairy cowsNo. of cattle

other than cowsof beef cows 1990 1995 1990 1995 1990 1995 1990 19950 85,7 70,3 0,0 0,0 543,8 438,1 860,6 754,41-19 10,2 15,4 50,6 95,7 28,5 40,7 162,9 273,920-49 0,6 1,5 16,5 42,2 2,6 2,7 32,1 79,050 and over 0,1 0,2 7,6 19,2 1,6 0,6 12,5 30,5Totalwith beef cows 10,9 17,1 74,7 157,1 32,7 44,0 207,6 383,4 Average herd size with beef cows 6,9 9,2 3,0 2,6 19,1 22,5Source: Statistics Sweden

Since a major share of beef production originates from the dairy herds, the

economic conditions for dairy productions are decisive as to the development of the beef

industry. Within the EU, quotas for milk production are allocated to each country. A

substantial productivity increase can be noticed for the dairy industry while the productivity in

the beef industry is more subtle. In Sweden the average yield per dairy cow in production that

participate in the official milk recording have increased with approximately 2% per year during

the last ten years.7 (Yearbook of Agricultural Statistics) Hence, fewer dairy cows will be

required to produce the maximal volume of milk regulated by the EU quota. As a consequence

the recruitment basis for beef production is further reduced. Consequently, a system with dairy

quotas works as a cost increasing and supply reducing mechanism for beef production in the

presence of a productivity increase in the dairy industry.

7 In 1995, approximately 80% of the dairy cows were included in the official dairy cow control.

29

2.2.3 Meat industry

The structure of the Swedish beef slaughter industry, is similar to the structure of

pork slaughter. The co-operative slaughter industries dominate the market and account for

75% of the slaughter volumes of cattle (Nilsson, SFMMA, 1996). The remaining volume is

handled by privately or investor owned slaughter companies, most of which are organised in

The Swedish Meat Trade Association, SMTA (Köttbranschens Riksförbund). For a more

thorough description of the market read section 2.1.3.

In the beef slaughtering market, four of the five largest companies belong to the

category co-operative associations.8 Besides the co-operative industries, the main slaughtering

companies on the private or investor owned companies are SLP AB in Helsingborg, Skövde

slakteri AB in Skövde, AB Dalsjöfors Kontrollslakteri in Dalsjöfors, CCM slakt AB in

Hultsfred and Br Karlsson slakteri in Vara. (Jonsson, P., SBA) As in the case of pork, the beef

slaughtering market is dominated by a few large companies. The four firm concentration ratio

amounts to 73.7, i.e. the four largest (all four are co-operative associations) firms represent

73.7% of the market.9 The Herfindahl-Hirschman index for the four firms is 2194.1.

Table Q Total slaughter production *

Year 1976 1980 1985 1990 1991 1992 1993 1994 1995

Production carcasses (‘000) 690 690 722 576 530 495 533 531 531

tons (‘000) 148 156 157 145 136 129 140 141 143

* Slaughter at home excludedSource: Yearbook of Agricultural Statistics, Statistics Sweden

Table R Number of abattoirs over time, total and EU approved

Year 1991 1992 1993 1994 1995

No. of large scale abattoirs 33 32 31 32 31

No. of small scale abattoirs2 11 11 24 25 24

EU approved large scale plants 1 12 11 11 14 21

Total no. of beef abattoirs 44 43 55 57 55

without pork production 1 0 1 2 11 According to article 10, Directive 64/433/EEC. Before Sweden became a member of the EU, the plantsexporting to EU. 2 Before Sweden became a member of the EU, only the plants exporting to EU needed

8 The five cooperative associations constituting the SCAN group are treated as separate firms.9 The concentration ratios refers to the market share of a specific meat although most of the firms slaughterboth pork and beef.

30

approval, typically the large scale abattoirs. As of 1997 all small scale abattoirs are approved according toarticle 4 A-C in the Council Directive 6/433/EEC and Directive 91/495/EEC.Source: Statistics from NFA and Jonsson, P., SBA.

The general tendency in the beef industry is similar to pork. The close-down of

smaller production units and increasing the capacity of larger plants are dominating features.

At the same time the number of small scale plants increases.

In terms of the co-operative fraction of the industry, the major increase in beef

abattoir output occurred between 1989 and 1995. During this period the average slaughtered

volume per plant increased from 18 thousand carcasses in 1989 to 27 thousand in 1995. In

terms of the aggregate industry, average slaughtered volume decreased with more than 25%.

During the same period, the average throughput for abattoirs producing more than 10 000

(constituting 80-85% of the total volume) heads per year increased by almost 15%.

Table S Number of abattoirs and throughput in relation to size of throughput, 1989 and 1995

Headsper year

No. of Abattoirs(Co-operative)

Throughput,cattle (‘000)

Throughput,%

1989 1995 1989 1995 1989 1995-100 0 9 0,2 -101-1000 5 15 (1) 2,8 5,7 0,5% 1,1%1001-5000 10 10 (1) 20,5 28,1 3,7% 5,3%5001-10000 11 7 (3) 83,5 51,3 15,1% 9,7%10001-20000 8 9 (4) 113,0 144,7 20,5% 27,2%20001-40000 5 3 (3) 129,3 107,0 23,4% 20,1%>40000 4 3 (3) 202,8 194,8 36,7% 36,6%Total 43 47 551,8 531,6 100% 100%Average plantthroughput, total 12,8 9,5in abattoirs>10 000 heads (17) (15) 26,2 29,8 (80,6%) (83,9%)Source: Jonsson, H., Swedish Board of Agriculture (1996)

The average carcass weight of beef has displayed a continuos increase the last

years. In 1995 the average weight was 279,5 kg following an increase of more than 1% per

year during the last 5-10 years. 3-6 months old calves display the same tendency, with an

average slaughter weight of 109,2 kg in 1995, compared to 107,3 in 1990 and 96,1 in 1986.

The average carcass weight for calves less than 3 months old was 23,9 kg in 1995, compared

to 21,7 in 1990 and 23,3 in 1986.

31

In Sweden, classification of carcasses has been conducted for commercial use

since the 1930’s and is required by law since 1941. Swedish law states that all slaughtered

livestock, except for farm level slaughter for personal use should be classified10. In reality this

regulation implies that more than 99% of the livestock is classified.

In Sweden the classification scheme for bovine consists of the EUROP system

and a classification of the carcasses into different levels of fat concentrations. The EUROP

classification, which is a system used in the EU (official in the EU since 1993), was introduced

in Sweden 1992. EUROP consists of 15 grades, where each main grade includes a plus and a

minus subgroup. To calculate an average grade, e.g. of Swedish beef, the lowest grade P-

equals 1, and the highest grade E+ equals 15, and the numerical grades are then multiplied with

the proportions of each grade.

In Sweden the fat content is graded according to two different classification

systems. The larger abattoirs use the EU system while the smaller still use the old national

system, which is slightly different. Instead of the EU’s 1-5 grade the old Swedish classification

is divided into ten different grades where each grade is labelled by the actual fat content (02,

04, 06, 08, 10, 12, 14, 17, 21, 25). In the old Swedish system the fat content is measured in a

somewhat different manner. The grades can be transformed into the EU classification

according to the table below. By January 1999, the EU classification system will be fully

adopted in Sweden. Like the EUROP system, the EU 1-5 grade system for fat classification is

divided into subgroups of plus and minus. An average fat grade can be derived by scaling the

grade 1- being equal to one etc. up to the highest grade 5+ being equal to 15. (Jonsson, H.,

SBA, 1997)

Table T EUROP classification of bovine carcasses 1995

*No. ofheads

E U R+ R R- O+ O O- P+ P Averagepoint

Young bulls A 231874 0 2 4 8 9 12 30 27 6 1 5,4Bulls B 2434 2 9 14 17 14 12 19 10 3 0 7,0Steers C 8418 0 0 0 1 3 6 28 46 14 2 4,4Cows D 140861 0 0 0 1 2 5 18 31 24 18 3,8Young cows D 65913 0 0 0 1 2 3 13 29 29 23 3,5Heifer E 52335 0 0 1 5 8 12 27 29 13 5 4,8

10 According to EU legislation only slaughter plants, handling more than 75 livestock units per week arerequired/obliged to classify the carcasses, 1 livestock unit equals 1 cow or 5 pigs.

32

Calves1-3 months ** 2008 0 0 2 5 11 14 28 25 11 4 5,0Calves3-6 months ** 26531 0 0 0 1 3 7 26 37 15 10 4,2* Categories according to Council regulation 1208/81/EEC. No distinction is made between Cows and Youngcows in the EU classification system. ** Calves do not have to be classified according to EU regulationsSource: Jonsson, H., Klasssificeringsverksamheten 1995, 1996.

Table U Fat classification of bovine carcasses 1995

* No. ofheads

02 04 06 08 10 12 14 17 21 25

Young bulls A 231874 0 2 4 8 9 12 30 27 6 1Bulls B 2434 2 9 14 17 14 12 19 10 3 0Steers C 8418 0 0 0 1 3 6 28 46 14 2Cows D 140861 0 0 0 1 2 5 18 31 24 18Young cows D 65913 0 0 0 1 2 3 13 29 29 23Heifer E 52335 0 0 1 5 8 12 27 29 13 5Calves1-3 moths ** 2008 0 0 2 5 11 14 28 25 11 4Calves3-6 months ** 26531 0 0 0 1 3 7 26 37 15 10* Categories according to Council regulation 1208/81/EEC. No distinction is made between Cows and Youngcows in the EU classification system. ** Calves do not have to be classified according to EU regulationsSource: Jonsson, H., Klasssificeringsverksamheten 1995, 1996.

A comparison of the classification between different EU members reveals that

Sweden generally does not have a high ranking. Regarding young bulls approximately 2% of

the Swedish carcasses were graded U or better. This should be compared to less than 2% for

the Finnish production, approximately 8% of the Danish production, approximately 30% in

Germany, UK and Ireland and more than 45% in Spain and Italy (European Commission,

1997). It seems to exist some type of geographical pattern. The reasons for the wide

discrepancies may be attributable to the differences in climate which could influence whether

the production systems are of extensive or intensive nature. Another feature which might

influence the differences in grades between countries, is to what extent beef primarily is a by-

product from the dairy production or if beef is produced through special beef breed such as

Aberdeen Angus, Hereford, Charlois etc.. The reasons mentioned seem to be plausible

hypotheses although they have not been examined further in this report.

Table V Fat classification

EU grades 1 2 3 4 5

33

EquivalentSwedish grades 02 04, half 06 half 06,08,10 12, 14, 17 21, 25Source: Jonsson, H., 1997.

The processing level for beef can not be separated from the pork processing. In

section 2.1.3 the processing level for beef and pork is described.

2.2.4 Retail

As mentioned previously the Swedish retail level is highly concentrated. This

situation make it impossible to obtain detailed information for beef separately and even for

meat in general. The description of the retail market in section 2.1.4 therefore applies equally

well to the beef industry.

2.2.5 Trade

As mentioned in section 2.1.5. the prevailing regulatory system influences trade

to a large degree. This is a consequence of the impacts of the regulatory system upon

production, and the level of excess supply. The same arguments as for pork, described in

section 2.1.5, apply to beef. However, beef exports have been rather stable during different

regulatory regimes while imports have been increasing over time.

Table W Import and export of live cattle in Sweden, 1985-1994, heads.

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994Import 64 51 66 101 54 118 186 156 113 63Export 1 056 1 973 1 411 258 8 47 54 105 108 491Source: Foreign Trade, Statistics Sweden

Live cattle are mainly imported from Denmark and Canada. Norway and Finland

account for the major share of the exports. Imports of beef and veal mainly originate from

Germany (27%), Ireland (25%), Denmark (12%) and Finland (10%). Import of Irish beef is

increasing. Beef and veal are primarily exported to Finland (49%), Germany (27%) and Russia

(8%). (SFMMA, 1997)

34

Table X Imports and exports of beef (incl. veal) in Sweden, 1985-1996, millionkilograms

1985 1987 1989 1990 1991 1992 1993 1994 1995 1996Imports 7,0 16,1 14,0 12,5 19,2 25,9 20,7 23,7 27,0 39,0Exports 32,8 7,2 7,2 11,8 10,8 7,3 11,2 8,0 6,0 8,0Source: SFMMA(1996) & Journal of Agricultural Economics (1996:1, 1994:11, 1995:4)

A drastic shift in beef production occurred in the mid eighties. Export volume fell

from 20-25% to around 5% of total production. Since the mid 80’s exported volume has

ranged between 5- 10 thousand tons which accounts for less than 10% of the total production.

Neither the deregulation in 1991, nor the Swedish membership of the EU, show any drastic

impact on the volume of exports or production of beef.

2.2.6 Inter-relationship along the supply chain

Regarding the inter- relationship along the supply chain, see section 2.1.6


See section 2.1.7.


Sweden has largely been spared from major outbreaks of many of the diseases in

other European countries, e.g. Foot and mouth disease and Paratuberculos. As a

consequence, animal health in the clinical sense has not been any great public issue.

Accordingly, issues of ethical concerns have lead to focusing on the wider concept of animal

welfare. The latter concept includes not only the clinical aspects but also aspects related to the

perceived well-being of the animals. Quality policy issues regarding beef production are to a

large extent similar to the quality issues for pork production, discussed in section 2.1.8. The

roaring debate during the eighties, previously mentioned, concerning carcasses in feed, lead to

a prohibition on feeding ruminants meal originating from carcasses of ruminants. The animal

welfare debate that resulted in the Animal protection law of 1988 involved many different

quality issues in beef production, such as for example building design and grazing regulations.

The specific animal health issues have, like for pork production, not been any

great public concern in itself. The issues have largely focused upon the human health/safety

aspects of animal diseases. The BSE debate has been quite intense in Sweden. Between the 20

35

of March and the 4 of April 1996, 553 reports appeared in radio and television. Since then,

media attention has become less intensive but BSE still remains an issue of great

concern.(Stenson, 1997) Salmonella and e-coli are other quality issues that occasionally appear

in the media. (Svensson, 1997)

2.3 Chicken


The Swedish poultry industry experienced a major crises in 1987. The crises

resulted as a consequence of the media attention on human diseases attributable to

campolybacter in poultry (Ekman & Ekman, 1995 & Lagergren, 1991). Consumption (see

Table 11, section 2.1.7) as well as domestic production fell drastically. The quality programs

and information campaigns that followed the campolybacter debate improved the conditions

for the industry and domestic supply has been increasing ever since. From 1987 to 1996

production has doubled. Imports of poultry have been rather marginal, primarily consisting of

other poultry than chicken. Exports of poultry have increased in recent years but still

constitutes less than 10% of the domestic production.

The Swedish poultry meat market has been close to self-sufficient for a long

period of time. Sweden has had a regulatory system on poultry regarding salmonella, which has

in effect served as a non-tariff barrier towards imports albeit not prohibiting imports. As

Sweden became a member of the EU, an exemption from the rules of the internal market was

agreed upon. Hence, Sweden still maintains restrictions regarding salmonella testing on

imported and domestic volumes. As foreign companies adjust to the rules, it is possible that

trade will increase. However, future developments may work in the opposite direction, with an

increase in exports. (Carlström, 1997)

Table Y Trends in supply of poultry by source, 1985-1996 in million kilograms

Year 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996†

Domestic 1 35,5 37,3 35,5 34,7 39,9 43,3 48,5 50,3 55,3 67,4 73,2 76,3

Imports 2 0,1 0,3 0,2 0,9 1,0 1,5 2,0 2,2 1,7 1,6 1,5 2,9

Total supply 35,6 37,6 35,7 35,6 40,9 44,8 50,5 52,5 57,0 69,0 74,7 79,2

Exports 2 1,3 1,3 1,6 0,3 0,1 0,2 0,2 0,1 1,7 5,0 5,3 4,7

Supply in the 36,9 38,9 37,3 35,9 41,0 45,0 50,7 52,6 58,7 74,0 80,0 83,9

36

Swedish market3

Self-sufficiency, %

97,9 107,0 122,5 101,9 101,0 102,5 109,5 98,6 101,3 118,9 117,1 *

† Provisional figures. 1 Chicken only. Figures from NFA slaughter statistics. Calculated with 25% waste atslaughter level. Average weights from Swedish Poultry Meat Association. 2 Total poultry. Figures from Journalof Agricultural Economics. The industry estimates 75% of the imports and 100% of the exports to be chicken(Carlström, 1997). 3 Approximate figures since production refers to production of chicken and no tradestatistics are available except for aggregated poultry. * Not available.Source: Slaktrapport, NFA, The Journal of Agricultural Economics (1996:6, 1991:11) & Swedish Poultry MeatAssociation (1996)

2.3.2 Production

The Swedish market for poultry has traditionally been close to self-sufficiency.

Swedish consumption of meat is, by European comparison, generally low. This is especially

true for chicken. In the mid eighties production fell but from 1988 and onwards production has

been increasing steadily. The campolybacter debate was one of the rationales for the poultry

industry to develop a quality program (see The Animal Welfare Program in the quality policy

section). In addition, a new animal protection law (Djurskyddslag SFS 1988:534) was

introduced in 1988 where e.g. antibiotics was prohibited as growth promotor in feed. These

events contributed positively to the expansion of the poultry sector. Consumption and

production inicreased from the late eighties and onwards.

There exist three hatcheries and approximately 160 commercial broiler producers

in Sweden. Production is concentrated to the south. As can be noticed in Table 24, poultry

production has more than doubled since 1988. During the same period 30% of the poultry

barns fall into the category of new and/or expansion investments. Consumption has almost

doubled (see Table 11, section 2.1.7) but imports and exports have remained to be rather

marginal. (Carlström, A., Swedish Poultry Meat Association, 1997)

Density is an important structural feature in the poultry production. Swedish

legislation implies more stringent animal welfare requirements than many other European

countries (e.g. density chicken/square meter, the salmonella program). However, there is a

trend towards higher density in the animal building area. In Sweden, the allowable flock density

varies depending on an annual evaluation of the standard of the barns/production unit. This

quality feature, introduced by the industry, is further described in the quality policy section (see

The Swedish Poultry Meat Associations Animal Welfare Program).

37

Figure G Structure of the poultry production in 1996, number of producers & percent of total building area by size of building area

0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

7 0 %

8 0 %

< 2 0 0 0 2 0 0 1 - 5 0 0 0 5 0 0 0 - 1 0 0 0 0 1 0 0 0 1 -

S q u a r e m e t e r s p e r p r o d u c e r

Num

ber

of p

rodu

cers

& p

erce

nata

ge o

f st

able

are

a

N u m b e r o f p r o d u c e r s

% o f t o t a l s t a b l e a r e a

Source: Swedish Poultry Meat Association (1997)

Figure H Structure of the poultry production in 1996, kg/m2 density in percent of total barn area

0 %

1 0 %

2 0 %

3 0 %

4 0 %

5 0 %

6 0 %

7 0 %

8 0 %

25-30 kg /sqm 31-33 kg /sqm 34-36 kg /sqm

Kg chicken per square meter

Perc

enta

ge

Source: Swedish Poultry Meat Association (1997)

A common feature of poultry and pork production is a pronounced trend towards

large scale industrial production systems. In the beef industry, the small scale characteristics

prevail and there is no clear trend towards a more industrially oriented production pattern.

38

2.3.3 Meat industry

The Swedish market for poultry is represented by the organisation Swedish

Poultry Meat Association (Svensk Fågel). At the slaughter level the organisation represents

about 10 slaughter companies and 99% of the Swedish production. The poultry market is

dominated by the company AB Kronfågel (now part of Scandinavian Poultry) with a market

share just above 50%. Lagerbergs Kyckling AB in Sölvesborg and Guldfågeln AB in

Mörbylånga each has a market share between 10% and 15%. Gute Kyckling AB in Visby,

Torsåsens Fågelprodukter AB in Falkenberg and Vita Fågeln AB in Valla each have about 5%.

(Carlström, A., Swedish Poultry Meat Association, 1997). The four firm concentration ratio is

82, i.e. the four largest firms have 82% of the market and the Herfindahl-Hirschman index is

3030. Obviously the poultry industry is more concentrated than the pork and beef processing

industry.

Table Z Number of abattoirs and total throughput over time

Year 1985 1990 1991 1992 1993 1994 1995 1996†

No of poultry abattoirs 17 17 20 20 27 27 24 25

of which chicken 14 14 17 17 21 22 21 21

Throughput of chickens, millions* 36,4 38,6 43,3 43,6 48,3 56,7 61,3 63,2 thousand tons** 35,5 43,3 48,5 50,3 55,3 67,4 73,2 76,3

† Provisional figures * Including all chickens to slaughter. Figures from NFA slaughter statistics. ** Includingonly eatable chickens and estimated with 75% exchange. Average weights from Swedish Poultry MeatAssociation.Source: Slaktrapport, NFA & Carlström, Swedish Poultry Meat Association.

Table AA Abattoirs and throughput of chicken after size of throughput, 1995

Chickens,throughput per year

No. of Abattoirs Throughput Chickens (‘000) % of total

-10 000 4 24 0,0%10 001-100 000 6 176 0,3%100 001-1 000 000 1 498 0,8%1 000 001-10 000 0000 9 36 970 60,3%>10 000 000 1 23 644 38,6%Total 21 61 313 100%Average plant throughput 2 092Source: Slaktrapport, NFA, 1996.

39

In a five years period the average carcass weight has increased from 1,51 kg to

1,62 kg in 1995. Approximately one million chickens (1,5% of the total production) did not

meet the quality standards and were discarded. In the beginning of 1997 six abattoirs were

approved according to the EU regulations. These abattoirs represented more than 85% of the

total slaughter volume of chicken as of 1996.

2.3.4 Retail

The structure of the retail chain applies to poultry as for pork and beef. Due to

the structure of the retail market, desegregated data regarding the sales of poultry meat is not

available. A general description of the market is available in section 2.1.4.

2.3.5 Trade

Not surprisingly the Swedish poultry meat market is close to self-sufficiency.

During a long period of time the regulatory requirements on imports have in effect served as a

non-tariff barrier towards imports. As Sweden became a member of the EU, an exemption

from the rules of the internal market was agreed upon. Hence, Sweden still maintains

restrictions regarding salmonella testing on imported and domestic volumes. As foreign

companies adjust to the rules, it is possible that trade will increase. Finland is already

attempting to expand in the Swedish poultry meat market. (Carlström, 1997)

Trade is marginal in terms of live animals as well as poultry meat. Live imports

typically originate from Scotland and consist of day old chickens to be used in the Grand-

parent system. Only a few shipments per year are made. Exports typically consist of parent

animals and the existing trade is basically directed towards Denmark. Imports of poultry meat

are marginal, but Finnish companies are trying to expand into the Swedish market. Denmark

and France also export to Sweden. Out of the relatively minor Swedish export volume, a major

share is directed to Denmark, although some volumes are exported to Finland and Germany. In

addition, minor quantities of both live chickens and poultry meat are exported to various other

countries.

Table BB Import and export of live chicken in Sweden, 1985-1994, thousands.

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994Import 72 139 61 44 75 59 62 50 61 79

40

Export 22 1 110 38 15 109 576 545 406 595Source: Foreign Trade, Statistics Sweden

Table CC Imports and exports of poultry in Sweden, 1985-1996, million kilograms *

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995† 1996†Imports 0,1 0,3 0,2 0,9 1,0 1,5 2,0 2,2 1,7 1,6 1,5 3,3

Exports 1,3 1,3 1,6 0,3 0,1 0,2 0,2 0,1 1,7 5,0 5,3 4,7* Total poultry. The industry estimates 75% of the imports and 100% of the exports to be chicken (Carlström,1997). † Preliminary figuresSource: Carlström (1997) & Journal of Agricultural Economics (1996:1, 1994:11, 1995:4)

2.3.6 Inter-relationship along the supply chain

The poultry industry is organised in the Swedish Poultry Meat Association

(Svensk Fågel). The members of the Swedish Poultry Meat Association consists of three

hatcheries, approximately 160 producers, 10 slaughter companies and some feed companies.

The members are, like in SMTA, privately or investor owned companies. 97% of the poultry

production is organised through the Swedish Poultry Meat Association. 99% of the poultry

meat is slaughtered in member companies of Swedish Poultry Meat Association. The members

of the organisation co-operate closely in a quality program labelled The Swedish Poultry Meat

Associations Animal Welfare Program (Djuromsorgsprogrammet) which is explained further

in the quality policy section. The production is generally contracted by slaughter companies.

(Carlström, Swedish Poultry Meat Association, 1997)

The co-operation between different companies at same level of the meat supply

chain deserves to be mentioned. This form of horizontal integration is manifested in different

organisations that for example focus on animal health (e.g. The Swedish Animal Health

Service, The Animal Welfare Program ), voluntary testing and quarantine restrictions on

imported live animals (e.g. Swedish Animal Farmers Protective Infection Control) etc. Some

of these organisations are discussed in the quality policy section.

41


As mentioned previously, the consumption of poultry decreased drastically as a

consequence of the campolybacter debate in 1987. Consumption fell more than 15% between

1986 and 1987. Since then, the total consumption has more than doubled. In section 2.1.7

some comparisons with other meats are made and per capita consumption is displayed in Table

11.

Figure I Historical development of wholesale prices per kilogram slaughtered carcass forselected meat categories during the period 1976- 1995 (1995 price level)

0

5

10

15

20

25

30

35

40

45

50

1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996

Year

Kilo

gram

Egg

Poultry

Beef

Vea l

Mut ton & lamb

Pigmeat

Source: Statens Jordbruksnämnd (1981-1984) & Swedish Board of Agriculture(1996)

Specific historical data regarding retail prices for individual food items are not

readily available in Sweden. However, in order to demonstrate long term real price trends

Figure 9 is displayed. It is noticeable that the real price of meat has fallen at the wholesale level

for all categories of meat. The trend appears to be most pronounced for poultry and eggs. To

what extent this is one of the explanations of the increase in poultry consumption remains an

issue for further empirical research.

42

According to the Swedish Poultry Meat Association a consumer trend towards a

higher degree of cut and processed poultry meat can be observed. This could be a partial

explanation to the increase in poultry consumption. The consumers perceive chicken as price

worthy, lean, healthy and to fit well into the trends of ethnic food. (Carlström, 1997)


Animal health and the wider concept of animal welfare have been major public

quality issues concerning pork as well as beef. However, animal welfare has hardly been a

media issue concerning the poultry production. The quality issues in poultry production have,

in contrast to the recent issues concerning read meat, primarily focused on human safety and

human health.

The campolybacter debate resulted in approximately 1400 articles, 150-200 radio

reports and 40-50 reports on television during 1987. Following rather extensive consumer

studies, the industry realised that the public had a quite negative view of the poultry industry.

Although animal welfare issues never appeared as a public issue, apparently consumers

perceived poultry production as being too industrially oriented and not taking animal welfare

concerns into account. Further, the consumer surveys revealed that consumers did not cook

the chicken in a proper way. As a consequence of the debate the industry launched an

information campaign as well as the Swedish Poultry Meat Associations Animal Welfare

Program ((Djuromssorgsprogrammet) further developed in the quality policy section) to

improve the production technology. Since then the media perception of the poultry industry

has become rather positive and consumption has increased (see Table 11, section 2.1.7).

(Ekman & Ekman, 1995 and Lagergren, Swedish Poultry Meat Association, 1991)

The Swedish Poultry Meat Associations Animal Welfare Program changed the

media view of poultry production. The program was quite extensive in terms of adressing

animal ealth/welfare and human health/safety issues. As a consequence, public quality issues in

recent years have not concerned domestic poultry production to any large extent. Imports have

once again brought up the issue of salmonella. This issue does not involve domestic production

since at the consumer level 0% of the Swedish chickens has salmonella (Swedish Poultry Meat

Association, Pressmeddelande, 1996). Naturally the industry occasionally attracts media

attention, e.g. after the outbreak of the Newcastle disease in 1995, but it has not atttracted a

lot of interest recently.

43

Quality of chicken meat has primarily been a quality issue for the industry itself

although not in the media. The industry has succeeded in increasing the average weight of the

chicken with approximately 18% the over last ten years. According to some people a heavier

chicken gives a better flavour. The main rational, besides the economic aspects, for increasing

the slaughter weight is to adhere to the increase in demand for processed products. The latter

product require a larger chicken. (Lagergren, 1991 & Carlström, 1997)

44

3 Institutional arrangements

3.1 GovernmentAccording to §1 Regeringsformen (1974:152) all power emanates from the

people. This right is enacted through a parliamentary system and the municipal right of self

determination. The Swedish parliament has supreme legislative power in Sweden. According to

§11 chapter 8, the national government can, if authorised by the parliament, delegate to a

national administrative authority or municipal the right to regulate a specific area. The

responsibilities for governmental regulations are divided between the Swedish Board of

Agriculture (SBA, Jordbruksverket) and the National Food Administration (NFA,

Livsmedelsverket). According to §7 chapter 11, no other authority, nor the government, has

the right to decide how national administrative authorities should act in any specific case

relating to an individual, municipality or issues regarding the interpretation of the law. The

municipalities have the right to self determination.

3.1.1 The Ministry of Agriculture

According to §1 chapter 7 Regeringsformen (1974:152) ministries, within

different areas of expertise should prepare cabinet affairs/issues. The ministry of agriculture is

divided into several sections of which three are directly concerned with issues regarding food

production and food handling. The section on animal/animal products and the section on

cereals are primarily responsible for matters regarding the production and marketing of

animal/animal products and cereals. The section on food is responsible for matters relating to

food control, animal health/welfare etc. A special section is responsible for the co-ordination of

issues pertaining to the Swedish membership in the EU. The ministry prepares cabinet affairs

and is responsible for administrative issues relating to authorities such as SBA, NFA, SVA.

However, as stated previously, the ministry has no right to decide how SBA or NFA should

act in any specific case relating to an individual, municipality or in any matter regarding the

interpretation of the law.

3.1.2 The Swedish Board of Agriculture

The Swedish Board of Agriculture (SBA) is the responsible authority for the

central supervision regarding animal husbandry practices and production up until the animals

45

are slaughtered (24§ Djurskyddslag (1988: 534)). The explicit objective of SBA is to actively

promote a competitive agricultural food industry that takes into account the environmental and

animal protection concerns adhering to the interest of the consumers (§1 Förordning

(1996:148) med instruktioner för Statens jordbruksverk).

The parliament legislates general laws and the government issues general writs.

As mentioned previously the government, if authorised by the parliament, delegates the right to

regulate the details. This fact implies that SBA, through delegated power, has the right to issue

detailed regulations in the field of their expertise in order to fulfil the intentions of the general

laws and writs. Monitoring the regulations is generally executed at a more decentralised level

and SBA, besides regulating, first and foremost plays a co-ordinating role at the central level.

Issues regarding animal health/welfare and environmental concerns are handled by animal

health inspectors from the municipalities (see below). These committees serve as the

controlling authority at farm level. (Dahlén, SBA)

3.1.3 The National Food Administration

The National Food Administration is a national administrative authority. The

objective of the NFA is to promote safe food of good quality, conscientious and upright

handling of food and good eating habits, all in the interest of consumers. In order to achieve

these objectives the NFA regulates within the area of food products, conducts central

supervision and co-ordinates the controls regarding food. Further, NFA supplies information,

actively promotes the national goals of food and health, investigates food and eating habits and

develop methods for the food inspection. (§§2-3 Förordning (1996:147) med instruktion för

Statens Livsmedelsverk & §24 Livsmedelslag (1971:511)). The NFA supervises veterinary

work associated with the official mandatory carcass inspection (Förordning (1971:810) med

allmän veterinärinstruktion).

The NFA is responsible for food products and assumes responsibility of meat

products from the time of slaughter. Hence, NFA is responsible from the slaughter level and

downstream the food marketing chain. Therefore, the responsibility of NFA is to regulate the

slaughter, processing and sales of meat. In addition, the authority assumes the responsibility for

inspecting firms not subject to the municipal control that handle meat.

46

3.1.4 The County Administration

At the regional level, the County Administration acts as the supervisory

authority in areas such as animal keeping/protection as per the law on animal protection and

foods according to the law on provisions (56§ Djurskyddsförordning (1988:539) &

Livsmedelslag (1971:511)). In general The County Administration is responsible for issues

concerning for example animal protection, provisions control and agriculture unless some other

authority is responsible according to special directives (§3 Förordning (1990:1510) med

länsstyrelseinstruktion). The veterinarians from the County Administration (Länsstyrelsen) can

be summoned by the municipal animal health inspectors if additional professional expertise is

required. The County Administration plays a co-ordinating role between the municipals within

the county. Issues concerning general veterinary matters (apart from animal protection) do not

involve the municipalities, but the County Administration serves as the controlling authority.

Issues relating to infection/disease protection is handled by the County Administration with the

help of SVA (National Veterinary Institute). (Dahlén, SBA)

Decisions by the municipal body regarding these areas and regarding health

issues as covered by the law on health protection, and decisions by the veterinary inspector

regarding carcasses can be appealed to the County Administration (38§ Djurskyddslag

(1988:534) & Livsmedelslag (1971:511)). Decisions taken by any other authority, apart from

the national government and the municipality, can be appealed to a public administrative court.

(38§ Djurskyddslag (1988:534) & 25§ Hälsoskyddslagen (1982:1080)).

3.1.5 The municipal government

The Swedish municipalities have a large degree of self determination and are

actively involved in a number of areas. In terms of animal husbandry, the municipalities serve

as the supervising authority unless the government has decided that the responsibilities should

be exercised by some other authority. (24§ Djurskyddslag (1988: 534)). Each municipality is

responsible for the public health protection within its domain (2§ Hälsoskyddslag

(1982:1080)). The municipal assignments are divided between different committees where the

jurisdiction of each of the committees vary between municipalities. In the areas of relevance to

this report, the municipalities appoint committees, usually called Environmental- and health

protection committees (Miljö- och hälsoskydds nämnderna). These committees conduct

counselling and monitoring of for example food, animal protection, environment, health etc.

47

The law on provisions (24§ Livsmedelslag (1971:511)) states that NFA is the central

supervising authority regarding food. In addition, the law states that the municipalities

conducts the supervision within the municipal judicial domain unless the national government

has transferred the task to the NFA. The municipalities do not have any legislative power, but

maintain a monitoring power in terms of meat production. However, smaller/local food process

industries and retail level outlets are monitored and supervised by the municipal committees. In

reality, the municipal committees inspect the vast majority of the firms handling meat and meat

products. (Widell, NFA)

3.2 Non-governmentThere are a vast number of non-government organisations that are active in the

area of meat production in some regard. Many of these organisations are inter-related in one

way or another. It is not possible to describe them all here but in this section, thus a selected

few of the more important non-governmental institutions will be mentioned in this section.

3.2.1 The producer co-operative organisation, the Scan group

As mentioned previously the Swedish meat market is dominated by producer co-

operatives. Producer co-operatives consist of a number of different organisations, most of

which are organised in the Scan group.

Approximately 60 000 farmers own the five independent meat slaughter

associations, Skanek, Scan KLS, Scan Farmek, Scan Norrland and Scan Luleå. The

associations cover the entire geographical area of Sweden, each covering a specific region. The

slaughter associations organise the transport and slaughter of animals, the trade of live animals,

and provide services and consulting to improve production practices at farm level. Meat

cutting and meat processing in the south and central parts of Sweden, i.e. meat from Skanek,

Scan KLS and Scan Farmek, is conducted by Scan HB. Processing of the meat from the two

northern co-operative associations, Scan Norrland and Scan Luleå, is handled by the respective

association. Scanfood, which is owned by the umbrella organisation Swedish Farmers Meat

Marketing Association (SFMMA), manufactures and markets frozen meat products from the

associations.

SFMMA is owned by the five co-operative slaughter associations. The SFMMA

represent the Scan group at national and international level. SFMMA is responsible for the

48

Scan brand policy and operating and developing the jointly owned companies. Furthermore,

SFMMA provides commercial and marketing support to the Scan-group and supports

implementation of the research and development process at farm and industry level. The

Swedish Farmers Meat Research Institute is owned by the SFMMA. The institute initiates

research and development activities and provides consulting services for the co-operatives on

issues regarding the food marketing chain, with special emphasis on meat and meat products.

The processing companies that are owned and operated by the producer co-operatives are

gathered in the company Slakteriförbundet Invest AB. (SFMMA, Annual report 1995, 1996.)

Table DD The Scan group

Owners

F

Associations Companies owned by

the associations

Slakteriförbundet

(SFMMA) Invest

Areas with Co.

partially owned

S A Skanek Scan HB S Scanfood Breeding

C R Scan KLS Scan HB F Samfood Processing

A M Scan Farmek Scan HB M Dukat Transport

N E Scan Norrland M Ellco Food Real estate

R

S

Scan Luleå A Meat Marketing

Institute

Source: SFMMA, Annual report 1995, 1996.

3.2.2 The Swedish Meat Trade Association

The Swedish Meat Trade Association (SMTA) is an association of privately or

investor owned companies, all involved in the red meat market. SMTA is an association for

independent companies. The objective of SMTA is to represent the common interest of these

independent companies at the national and international level. As of the beginning of 1997, the

organisation consisted of 21 slaughter companies, 60 meat cutting companies, 92 other meat

processing companies and 9 other companies. SMTA represents 23% of the slaughter industry,

approximately 45% of the meat cutting industry and 53,5% of the other meat processing

companies. Even though the interests are represented in the same organisation there is no

general integration/co-ordination of the production between the member companies.

(Sturesson, SMTA, 1997)

49

3.2.3 Swedish Poultry Meat Association

The poultry industry is organised in the Swedish Poultry Meat Association

(Svensk Fågel ). The association consists of feed manufacturers, breeder companies,

hatcheries, poultry producers and slaughtering/processing companies. The Swedish Poultry

Meat Association represents the common interest of the members at the national and

international level, funds research (e.g. the examination for campolybacter in all slaughtered

flocks) etc. The members are, like in SMTA, privately or investor owned companies. 97% of

the poultry production is organised in the Swedish Poultry Meat Association and 99% of the

poultry meat is slaughtered by member companies. The members of the organisation co-

operate closely in a quality program named The Swedish Poultry Meat Associations Animal

Welfare Program (Djuromsorgsprogrammet) which is further explored in the section on

quality policy. (Carlström, Swedish Poultry Meat Association, 1997)

3.2.4 Other organisations

There are many different organisations in the area of meat production. Some

organisations specialising in meat production operate lobbying and information activities, e.g.

Nordic Beef Breeders’ Association (Nordisk Avelsförening för Biffraser), Swedish Meat-

Producers’ Association (Sveriges Nötköttsproducenter) and Swedish Pig Breeders’ Society

(Svenska Svinavelsföreningen). The Federation of Swedish Farmers (LRF) represent all

farmers and conducts lobbying, implements research etc.

The co-operation between different companies at the same level of the meat

supply chain deserves to be mentioned. This form of horizontal integration is manifested in

different organisations that for example focus on animal health (e.g. The Swedish Animal

Health Service), voluntary testing and quarantine restrictions on imported live animals (e.g.

Swedish Animal Farmers Protective Infection Control) etc. Some of these organisations are

discussed in the quality policy section. In this section only the Swedish Association for

Livestock Breeding and Production (Svensk Husdjursskötsel) are specifically mentioned.

3.2.4.1 Swedish Association for Livestock Breeding and ProductionSwedish Association for Livestock Breeding and Production (SHS) is an

organisation owned by 12 Livestock co-operatives (Husdjursföreningar) and bull centres, 6

dairy cow breeding societies, the Nordic Beef Breeders’ Association (Nordisk Avelsförening

50

för Biffraser), the Swedish Meat-Producers’ Association (Sveriges Nötköttsproducenter) and

The Swedish Pig Breeders’ Society (Svenska Svinavelsföreningen). SHS is a know-how

service company with the objective of channelling new research and general knowledge in

animal genetics and animal husbandry into practice. The organisation is divided into marketing,

customer support and research and development. SHS focuses on the improvement of animal

health, feed and production economic/efficiency aspects, conducting recording activities,

artificial insemination, education, and in general assists farmers with consulting advice etc. In

order to facilitate these services, SHS operates a data network system including data at the

individual herd/cow level. This database is frequently used for academic research in the fields

of animal genetics and animal husbandry by research staff at SHS as well as at academic

institutions. (Swedish Association for Livestock Breeding and Production, 1996; Jafner, 1997)

51

Table EE Regulating/supervising government authority at various levels of the food marketing chain.

Authority Producer level Slaughter level Process industry Wholesale & retail levelSwedish Board ofAgriculture (SBA)

- Food safety*

- Quality attribute**

RegulatesCentral supervisor

YES,e.g. additives, salmonella

control program etc.YES

e.g. animal keeping

RegulatesCentral supervisor

YES

YESe.g. animal keeping

NO

NO

NO

NO

National FoodAdministration (NFA)

- Food safety*

- Quality attribute**

NO

NO

RegulatesCentral food supervisor

(control the large orexporting industries)

YESe.g. hygiene, handling req.,

salmonella testingYES

e.g. labelling, product &compositional standards


(control the large orexporting industries)








County Administration- Food safety*- Quality attribute**

Regional supervisor(SBA regulations)

Regional supervisor(SBA & NFA regulations)

Regional supervisor(NFA regulations)

Regional supervisor(NFA regulations)

Municipal Committees- Food safety*- Quality attribute**

Supervises at local level(SBA regulations)

Supervises at local level(SBA & NFA regulations)

Supervises at local level(i.e. most of the control)

(NFA regulations)

Supervises at local level(i.e. most of the control)

(NFA regulations)National VeterinaryInstitute (under NFA)-Food safety*

Analyses salmonella tests,otherwise

only in the case of disease






only in the case of disease* Food safety includes human health and human safety. ** Quality attributes include animal health, animal welfare as well as meat quality.

52

4 Quality Policy

4.1 Overview of quality policy

Quality policy includes regulatory as well as voluntary components. As

mentioned previously the responsibilities for governmental regulations are divided between the

Swedish Board of Agriculture and the National Food Administration. The regulations from

Swedish Board of Agriculture concerns the farm level and the regulations from the National

Food Administration relates to food, i.e. from the slaughter and onwards.

The regulatory requirements at farm level consist partly of the adopted EU

legislation and partly of additional national requirements. All regulations at the farm level fall

under the jurisdiction of the Swedish Board of Agriculture. In this report, some of the more

important regulations and some of the specifics of the Swedish legislation will be mentioned, to

the extent that these regulations deviate from the EU regulations. Generally, the regulations by

the Swedish Board of Agriculture may be defined as process standards since they regulate the

animal husbandry practices. However, the process of producing beef, pork and chicken meat

may in many cases be regarded as a quality attribute of the product even though it does not

alter the traditional features of quality (i.e. taste, texture, durability etc.). This is especially

true when issues concerning animal welfare are examined. The distinction between process and

product standards may therefore to some extent be perceived as subjectively defined by the

consumer. If the consumer buys a certain product due to a specific process standard applied on

one or several stages in the food marketing chain, the process standard actually becomes a

product standard as well. In this report, different SBA regulations will to some extent be

presented as both process and as product standards.

53

Figure J Quality Policy in Sweden

Quality Policy

Statutory regulation

SBA

NFA

Voluntary

- Animal WelfareRegulates farm level

Parliament/

- General laws/writs

- Health/Safety

Regulates process

- Human Health & Safety

SVA

MunicipalControl at local level

- Animal Welfare

at farm level

& retail level

Avels polen

* ISO

Co-operative

SFMMA

Scan Avel

- Meat quality

* KRAV/ekokött

- Meat Quality

- Process quality

Supervision

NFA

process/retail level Central supervisor

SBA

at farm/slaughter levelCentral supervisor

-Investigates in case of disease

* BIS

* BAS

Swedish Poultry

* Animal Welfare

Meat Associations

Program

- Animal Health

Swedish Farmers (LRF) Federation of

* Eco audit

* Swedish

Control Program Farmers Disease

* EMAS

- Environment- Animal Welfare

- Environment

- Animal Welfare

- Food Safety

- Meat Quality



Swedish Associationfor Livestock Breeding& Production (SHS)

- Animal Welfare

The Swedish Animal Health Service

- Human Health& Safety

Government PublicPrivate

*Recording activities etc

County Administration

Regional supervisor

-Salmonella testing

* Scan's AnimalWelfare Program

- Animal Welfare

- Environment

*Eradication Program - Animal Health

The Association for

- Animal Health Poultry Disease Control

The Campolybacter

- Food SafetyProgram

* SUNDA


- Meat Quality Naturbeteskött

- Animal Welfare

Swedham plus- Animal Welfare

54

Some of the most important laws that regulate the housing of animals and

production at farm level are the following: Djurskyddslag (animal protection law, SFS

1988:534), hereafter DL for short, Djurskyddsförordningen (animal protection writ, SFS

1988:539), hereafter DF for short, Lagen om foder (law on feed, SFS 1985:295), hereafter LF

for short etc. In addition two important regulations issued by the SBA are Statens

Jordbruksverks föreskrifter om djurhållning inom lantbruket m.m. (SBA regulations about

animal keeping etc., SJVFS 1993:129), hereafter FAR for short and Statens jordbruksverks

föreskrifter om foder (SBA’s regulations on feed, SJVFS 1993:177), hereafter SBAF for short.

The following regulations apply in general to all farm animals. Förordning med instruktion för

Statens livsmedelsverk (writ on instructions for SBA, SFS 1996:148) define the underlying

principles for the SBA activities. The regulations issued by the Swedish Board of Agriculture

can be regarded as both process standards (e.g. regulate housing systems etc.) and combined

product and process standards (e.g. prohibitions on the use of antibiotics etc.). Monitoring the

adherence to the regulations is generally executed at a more decentralised level. SBA, besides

regulating, only plays a co-ordinating role at the central level. (Dahlén, 1997)

The National Food Administration is responsible for regulations regarding food.

In terms of meat, the responsibility is initiated at the slaughter company and continues through

the processing industry, including the retail food outlet. At the slaughter and processing level

the agency supervises that all parties comply with the regulations. The monitoring of the

regulations is generally executed at a more decentralised level and NFA only monitors the

larger plants directly. A major share of the monitoring activities are conducted by the

municipalities. As for the regulations by the Swedish Board of Agriculture, some of the more

important regulations are stated and some of the specifics of the Swedish legislation that

deviate from the EU are specifically mentioned. In general, Sweden has adopted the EU

legislation. The hygiene standards (SLV FS 1996:6) and the handling of meat (SLV FS

1996:32) are generally the same as the EU directives. The following laws (with amendments)

regulate some of the activities of NFA and provide the authority to issue regulations according

to the laws and writs: Livsmedelslagen (law on provisions, SFS 1971:511), Hälsoskyddslag

(law on health protection, SFS 1982:1080), and Förordning med instruktion för Statens

livsmedelsverk (writ on instructions for NFA, SFS 1996:147). Sweden has incorporated the

HACCP method, according to Council directive 93/43/EEC, as the way for all business

activities handling food to conduct self-control. (SLV FS 1996:15; Widell, 1997; Pääjärvi,

1997; Lund, 1997)

55

The Scan group co-ordinates quality and product development programs through

for example The Meat Research Institute and The Swedish Animal Health Service. In addition,

the group has instituted a specific animal health enhancing program based on individual

consulting, veterinary monitoring programs and various forms of contractual arrangements

between the member/producer and the co-operative slaughter association. The strive towards

better quality in meat production was initially enacted when the Scan group in 1985 adopted

an eight point program to ensure improved animal care/welfare. The program was designed to

form an agenda for the future work towards improved animal welfare, especially at the primary

production level. This agenda includes, healthy breeding practices, mediation promoting animal

health, contracts that reward good animal health care practices, monitoring systems to detect

problems at farm level, counselling and information regarding improved breeding,

sound/healthy foraging, R & D for better animal care, lenient handling in animal transports etc.

(Scan, 1995).

The non-co-operative, or private group has approximately 20-25% of the pork

and beef market. A group within SMTA has a common brand, Sweedbeef, but as of today,

neither SMTA nor any of the other private companies, have any common quality program.

Hence, the individual companies develop their own quality programs and frequently even their

own brands. Consequently, many of the companies rely upon individual/firm specific quality

concepts. (Rutegård, 1997)

The Swedish poultry industry is organised by Swedish Poultry Meat Association.

All producers take part in a quality program called The Swedish Poultry Meat Associations

Animal Welfare Program (Djuromsorgsprogrammet). In addition to the legislated salmonella

control, the industry operates a control program for campolybacter.

4.2 Product standards

4.2.1 Labelling requirements

In SLV FS 1993:19 the regulatory requirements regarding the labelling of all

food items are regulated.11 The regulation constitutes what the labelling must include (and

what it can not include) as well as how it shall be displayed. Only the general rules for what

11 See also Council directive 79/112/EEC, The Commission directive 87/250/EEC, The Commission directives95/42/EG (SLV FS 1996:11) and 93/102/EEC (SLV FS 1994:45).

56

shall be included are mentioned in this report. 16§ states that the marking of food intended for

food industry, wholesale trade or retail trade shall include:

• an accurate designation of the product according to §§ 17-20

• a catalogue of each and every ingredient, with a few stated exceptions, in the

product according to §§ 21-35

• the net quantity of the product according to §§ 36-42

• either best before day or last day of consumption marking for all meat

products and generally for all food products with some exceptions (of which

most important are fresh vegetables and fruits, wine, various beverages etc.)

according to §§ 43-47

• special descriptions for storage or use of the product according to §§ 48-49

(generally the best before day or last day of consumption depends on how the

product is stored)

• name or company name and address of the manufacturer, the packer and the

seller (if within the sphere of EEA) according to §§ 50

• the origin of the product has to be stated only if the lack of it may mislead the

consumer, §§ 51

• directions for use of the product if necessary, §§ 52

• actual alcohol content of the product if it contains more than 1.2 volume

percentage units, §§ 53

Since firms want to associate their products with quality attributes, non-

regulatory quality labelling is, of course, common practice for firms whether they operate some

specified quality program or not. In the following sections, labelling will be mentioned when

brands are connected to a specific quality program.

4.2.2 Conformity

4.2.2.1 Carcass classificationIn Sweden, commercial classification of carcasses has been used since the 1930’s,

and since 1941 the classification has been required by law. Presently, the EU classification

systems are already used or are soon to be fully adopted regarding bovine and pig carcasses.

Present classification systems are described in detail in sections 2.1.3 and 2.2.3.

57

4.2.2.2 Product standards of meat

In SLV 1986:13 the definition of meat products are stated. Meat is defined as the

skeleton muscles including naturally attached fat and connective tissue. Larger sinews should

be removed and the meat should contain no more than 25% fat. Furthermore the maximal

proportion of water content and the required proportion of meat in different meat products are

regulated. SLV 1986:13 regulates the contents of for example certain sausages, meat balls,

minced meat, hamburger, bacon etc. (SLVFS 1986:13 & Pääjärvi, 1997) The definition of

meat is unique for Sweden, Norway and Finland. No equivalent regulation exist in the EU

regulation. (Svensson, 1997)

4.2.3 Origin

Labelling of origin enhances the traceability of the product for the consumer. As

previously mentioned, the regulatory requirements state that the origin of the product is

required on the labels only if the lack of it may mislead the consumer (51§ SLV FS 1993:19).

Sweden does not have any geographical brand names that have been approved by the EU.12

Although several meat products with geographical names exist (e.g. Falu korv), they are not

approved by the EU as locally or regionally affiliated products (e.g. Parma ham). Some of the

members of SMTA have launched the brand Sweedbeef. One of the major criteria for these

products is that they are produced in Sweden. In the same way Scan products are marketed as

Swedish produced meat.

4.2.3.1 Voluntary labelling of origin

In 1995 a voluntary labelling of the origin of meat was initiated at the retail level

and adopted by a major share of the retailers. The scheme was expanded to include a major

fraction of the meat cutting industry in 1996. Participating retailers and industries voluntary

commit to label meat, cut meat and non mixed cured meats with information about the country

of origin, i.e. where the animals are raised. (Ramvall, 1997)

On March 19th 1997, EU decided that from the year 2000, all meat produced

within EU has to be labelled by the country where the animals were raised and the country

where they were slaughtered. (Hedström, 1997).

12 See SFS 1995:1336 and the Council directives 2081/92/EEC and 2082/92/EEC.

58

4.2.3.2 Chicken from KronfågelIn order to inform consumers Kronfågel in many cases label the products with

information about the producer. The labels include information about the farmer e.g. name,

photograph, location and the phone number of the producer. (Sundgren, 1997)

4.2.4 Residues

According to §12 SFS 1988:534 and §28 SFS 1988:539 the use of hormones and

other substances for the purpose of affecting the quality of the meat or the productive capacity

of the animal is prohibited. However, the use of such substances is permitted if the purpose is

to prevent, cure or reduce symptoms of disease. This law does not adhere to animal feed

according to the law on feed (SFS 1985:295). All substances that fall under the law of

medicine (SFS 1992:859) are permitted to be used for medical purposes only.

4.2.5 Additives

See the section above regarding residues. The Swedish law on feed (SFS

1985:295, SFS 1992: 1681) states in § 4 that: Antibiotics and other chemotherapeutic

substances may be added to the feed only to prevent, reduce, or cure disease or symptoms of

disease. This means that the use of antibiotics and other chemotherapeutics is only permitted in

the event of directly observable medical indications. Consequently, it is forbidden to use such

substances in feed to promote growth, feed efficiency, shortcomings in the building

environment etc.

All substances subject to the jurisdiction of the law of medicine (SFS 1992:859)

are only permitted to be used for medical purposes. In addition, § 19 SFS 1993:177 states that,

except for fat and milk products, products stemming from ruminants are not permitted to be

used as feed ingredients for ruminants.

4.2.6 General food safety standards

General regulations concerning consumer goods are provided in the

Konsumentköplag (SFS 1990:932). The law regulates the rights of consumers in relation to the

seller, e.g. delivery, responsibilities in case of damage, payment, reversal of acquisition,

liabilities, reclamation etc. In 16§ the law states that the consumer good should fulfil what is

59

agreed upon in terms of type, quantity/volume, quality, packaging etc. Further, descriptions

necessary for assembling, usage, storing etc. should accompany the good.

The Livsmedelslag (1971:511) regulates definitions, qualities, handling, labelling,

supervision etc. of food products. In 5§ it is stated that marketed food products are not

allowed to be manufactured, or be in a condition such that they may be assumed to be harmful

to consume, be contagious or otherwise be considered unfit for human consumption. 16§

states general marketing requirements for food products, e.g. standard, quality, labelling,

freshness etc.

4.3 Process standards

4.3.1 General Food Standards

4.3.1.1 Food hygiene standards on premises handling food or food productsSLV FS 1996:6 is a regulation containing directions and general advice about

food premises and special regulations concerning food processing and food sales premises. All

food premises have to be approved beforehand. The regulation defines the general

requirements for approval of food premises and regulates the design of such premises. In

addition SLV FS 1996:6 defines hygiene requirements. These regulations are generally the

same as the EU regulations.13

4.3.1.2 Regulations specific for meat and meat productsIn SLV FS 1996:17 specific rules for minced and cured meat products are stated.

These rules should be complied to when producing and trading within Sweden or within the

EU14. The design of slaughter houses and the handling of animal/meat in the abattoirs is

regulated in SLV FS 1996:32, concerning red meat, and in SLV FS 1994:11, concerning

poultry meat.15 These regulations include:

• definitions of meat, food business, food premises etc.

• the conditions for inspection and evaluation of meat, the marking, book keeping and

reporting of meat

• description of the hygienic requirements for food business

13 See Council directive 93/43/EEC.14 See Council directive 94/65/EEC.

60

• requirements for handling meat in slaughtering, processing, packaging, transporting, storing

4.3.1.3 Salmonella regulationsIn the negotiations preceding membership of the EU Sweden was granted an

exception from the general EU regulations in the case of salmonella. The rational for the

exemption was the positive salmonella status Sweden had achieved by operating salmonella

control programs at farm level during decades. (As example can be mentioned that the

proportion of salmonella infected poultry at slaughter and meat cutting level is less than 0,1%.

These contaminated products are sorted out before reaching the consumer level (Swedish

Poultry Meat Association, Memo, 1996-10-04)). To maintain this status it was agreed that all

imported meat and meat products from EU should be tested for salmonella at the slaughter or

process level in the originating country (SLVFS 1995:20). In addition, Sweden was required to

expand the control program down stream the marketing chain in order to prove the salmonella

status in the country. (Bergman, 1997; SLVFS 1996:32; SLVFS 1994:11; SLVFS 1995:7)

The salmonella control program for cattle and pigs at the producer and slaughter

level include:

• clinical surveillance of herds and control programs in herds and slaughter

houses

• inspection of slaughtered animals under special conditions

• compulsory notification of any detection of salmonella

• compulsory action to isolate salmonella (e.g. prohibition of marketing infected

animals)

For poultry the same rules apply although the actions might be different. In addition the poultry

sector has a prophylactic salmonella control program which includes:

• rules for feed production and transports (e.g. heat treatment, hygiene control)

• hygienic restrictions to protect the poultry from infection from outside (e.g.

restrictions for visitors, rodent control, hygiene barriers)

• newly hatched salmonella free chickens are delivered from the hatcheries

• precautionary hygiene restrictions to prevent the salmonella infection from an

infected flock to spread

• in all poultry production the all in - all out principal is practised.

15 See also Council directive 91/495/EEC, 91/497-98/EEC, 95/23/EEC, 77/96/EEC, The Commission decision95/50/EG and specific for poultry the Council directive 92/116/EEC and appendix 1, section 1 in the EEA

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(National Veterinary Institute, SBA & NFA, 1995)

4.3.2 Agriculture

4.3.2.1 Differences in regulations by the SBA and the EU legislation at farm level

It is neither possible nor desirable to list all regulations at farm level. Instead,

some of the general differences between the Swedish and the EU regulations are listed in this

section. In addition to the EU legislation the Swedish regulations state:

• that the housing of animals should be handled in such a manner that the

animals are protected from disease and to promote the health of the animals

(§§2-4, 6 DL).

• that surgical operations are, with the exception of castration and de-horning

cattle according to DF §25, only allowed in the event of medical necessity

(DL §10). The EU regulations are not as specifically formulated which implies

that for example tail cutting on pigs is allowed and practised in most

countries.

• all animals should have access to litter which is a more stringent regulation

than in the EU (DF §16). (SBA, 1993; Ekesbo & Lund, 1993; Nyström,

1997)

• stricter regulations than EU regarding how the farm building should be

designed (DF §§1-3). These Swedish regulations are in accordance with the

rules of the European council and e.g. regulate a maximum allowable level of

noise and require windows in the farm buildings.

• that buildings (both new and rebuilding existing structures) as well as new

technical systems and equipment have to be approved by the government to

secure the well being of the animals (DF §5 and §7). (Regulations similar to

§7 can be found in the Swiss and Dutch legislation).

• more stringent regulations than EU regarding the design of fences,

exercise/rest yards and pasture/grazing land (§§ 24-28 FAR). (SBA, 1993;

Ekesbo & Lund, 1993; Nyström, 1997)

agreement.

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Differences in regulations by the SBA and the EU legislation specific for cattle

include:

• Π : 9,10,15§§ FAR, which regulates the management and calving of cows are

more stringent than the EU legislation. Grazing for beef is regulated in

10,11§§ DF (SFS 1988:539). The demand of inspection of cloven is regulated

in Π:12§ FAR. EU has no regulations addressing these issues. In Π: 24 §

FAR minimum measures of compartments for beef cattle are set to 4.5 m2 per

animal. In the EU no minimum requirements exist.

Differences in regulations by the SBA and the EU legislation specific for pigs

include the animal husbandry regulations in FAR. According to:

• Π : 32 § FAR each compartment should contain a maximum of 200 pigs or

400 pigs with continuos production. The barn should be built in such a manner

that these animals can be brought in and out through a door which has no

contact with any other compartment of the building. Sows should be

separated from each other by a partitioner when fed in boxes according to Π :

30§ FAR. In conventional breeding, piglets should be separated from the sow

according to Π : 29§ FAR. None of the above requirements are regulated in

the EU regulations. Regarding buildings and technical equipment Π:33,34 §§

FAR regulates the design of the medical ward in each barn and the equipment

required for outdoor grazing. This is not subject to regulations in the EU

legislation. In Π:35 § FAR minimum measures of compartments for pigs are

defined. (SBA, 1993; Ekesbo & Lund, 1993; Nyström, 1997)

Differences in regulations by the SBA and the EU legislation specific for chickens

include the following.

• Buildings and equipment are regulated in SJVFS 1993:129, app. 6 point 10

which states the floor area required for chickens (kg/ m2), the area at the

feeding tray, the area at the water trough and the number of chickens per

water tap. SJVFS 1994:92/93 regulates a compulsory salmonella control

program for chicken. Besides these regulations, which are stricter than in the

EU, there are no fundamental differences between the EU and the Swedish

legislation. (SBA, 1993; Ekesbo & Lund, 1993; Nyström, 1997)

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4.3.2.2 Swedish Farmers’ Disease Control Program

After Sweden became a member of the EU, the national regulations regarding

live imports had to be modified. Import controls became less strict. Since the Swedish

producers considered the formerly regulated system a guarantee for maintaining a good animal

health status in the domestic livestock industries they formed the voluntary organisation

Swedish Farmers’ Protective Infection Control, SDS (Svenska djurbönders

smittskyddskontroll). The objectives of the organisation is to maintain the good animal health

status in Sweden. In order to reach the goal, SDS retain the rules for live imports previously

stated by governmental regulations. Hence, animals imported live are tested and subjected to

quarantine on voluntary basis. Besides live animals, the control also includes eggs, sperm and

embryos.

The Swedish Animal Health Service and SHS are responsible for the program

which include cattle, pigs, sheep and reindeers. The type of tests performed on imports depend

on the animal health conditions in the exporting country. Commonly, tests are conducted for

e.g. paratuberculosis, IBR/IPV, BVD and campolybacter. The entire commercial meat industry

is involved in this program. For example the members of SFMMA and SMTA require that all

their suppliers adhere to the rules of SDS. (The Swedish Animal Health Service, 1995 &

Swedish Farmers Disease Control Program, 1994 &1995)

Since the program sustains conditions prior to the EU-membership, it can be

regarded as a method for protecting the Swedish model. There exists no labelling for the SDS

but most Swedish producers label their goods ”Swedish” in some way. (Holmström, 1997) The

costs are relatively small considering the cost of risking the domestic trademarks. Since the

Swedish industry is characterised by higher costs, both due to the costs of national regulations

and in many cases additional investments in voluntary programs, the industry has an incentive

to protect the good reputation accomplished through the Swedish model. So far the Swedish

Farmers Disease Control Program has succeeded in maintaining the same level of control on

imports as before the EU-membership.

4.3.2.3 The Association for Poultry Disease ControlThe poultry sector has developed a program similar to the Swedish Farmers’

Protective Infection Control. The aim of The Association for Poultry Control (Föreningen för

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Smittskyddskontroll av Fjäderfä) is to maintain a good health status in the poultry sector

through voluntary restrictions on imports. One major difference between poultry and e.g. pigs

and cattle is that poultry is imported for many other purposes other than commercial food

production. Hence, The Association for Poultry Control includes various kinds of hobby

organisations, dealing with pigeons, exhibition birds etc. It is extremely important that all

imports are covered since the diseases easily can be spread from birds kept on a hobby basis to

commercial poultry production. The Association for Poultry Control requires tests of for

example Turkey Rhino Tracheit (TRT), Infectious Laryngo Tracheit (ILT) and all forms of

salmonella. (Carlström, 1997)

The program has been successful in the sense that practically all imports are

subjected to the rules of The Association for Poultry Disease Control. The health status of the

Swedish poultry has been maintained at the same level of prevalence previous to the

deregulation, which was the objective of the policy. There exists no specific labelling but most

Swedish producers label the goods ”Swedish” in some way as in the case of beef and pork.

(Carlström, 1997)

4.3.2.4 The Swedish Animal Health Service- Pork, beef and lamb

The Swedish Animal Health Service is an organisation financed by both the

producers and by the government. In 1995 approximately 70% of pork and 60-70 % of the

beef produced originated from farms participating in the animal health program. The main

objective of the organisation is to improve animal health in Sweden. The Swedish Animal

Health Service operates animal health programs with the objective to trace, cure and prevent

various diseases occurring in the production of pigs, beef and lamb. This task is accomplished

through information, research and continuously recording/monitoring of the individual farms.

The activities of The Swedish Animal Health Service include:

• counselling and informing farmers and controlling the health of the animals

• supervising/organising special protective/eradication programs, e.g.

Aujeszky’s disease in pigs, Maedi Visna in sheep

• supervising/organising the autopsy activity

• participating in the municipal animal protection supervision

• performing third party investigations, e.g. for SBA or insurance companies

(The Swedish Animal Health Service, 1994, 1995, 1996)

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4.3.2.5 Recording programs in the red meat sectorExtensive monitoring activities are conducted through different recording

programs. These programs are basically advisory programs for the individual farmers. The

general objective is to supply a basis for production planning at farm level, quality assessment

of animals, breeding activity (e.g. when trading) research and development etc. These activities

have been in place for a long time and include the following programs.

• Milk recording has been in effect since 1899. In 1994/95 the participation rate amounted to

approximately 80% of the dairy cows.

• Recording of pig breeding livestock has been in effect since 1923. The recording program

for pigs is mainly operated by the co-operative company Scan Avel and is available to all

farmers. The results of the recording programs are used in order to promote genetic

capacity associated with production, fertility, durability and meat quality.16

• Recording of cattle for beef production has been in effect since 1967. By September 1995

the recording program changed. Presently it is called KAP (meat, breeding and production).

The objective is to collect genetic/performance information in order to improve beef

breeding in such a manner that important quality attributes are enhanced.

Swedish Association for Livestock Breeding and Production, SHS (Svensk

Husdjursskötsel), is the supervisor of KAP as well as the milk recording program. At

local/regional level the recording activities are provided by the Livestock co-operatives

(Husdjursföreningar) or slaughter associations (see Swedish Association for Livestock

Breeding and Production in chapter 3). The recording programs are structured in accordance

with the general regulations set up by SBA, while the details of the controls are decided by

SHS. (Statistics Sweden, Yearbook of Agricultural Statistics)

4.3.2.6 Protective/eradication programs Several protective/eradication programs have been introduced in Sweden. Some

are compulsory and some are voluntary. Regarding pigs, the most important program is the

Aujezsky’s disease eradication program. In 1991 a decision was made by the industry to

eradicate AD. By the summer of 1994 the program became compulsory. However, prior to

that date all but three farms participated in the voluntary program. The program was operated

66

by the Swedish Animal Health Service and as of 1995 the number of AD-outbreaks was

recorded at zero level. (The Swedish Animal Health Service, 1995, 1996)

Eradication programs of cattle diseases are operated by Swedish Association for

Livestock Breeding and Production and their members. In 1989 a voluntary program for

eradication of Enzootic Bovine Leukosis (EBL) was launched. All cattle older than one year

are sampled. Infected animals are culled and the farmers receive a premium for each

slaughtered animal. In 1995 the EBL program became compulsory. A voluntary eradication

program for Bovine Virus Diarrhoea (BVD) was introduced a few years after the EBL-

program. The Swedish Board of Agriculture has introduced a compulsory control program of

Infectious Bovine Rhinotracheitis/Infectious Pustular Vulvovaginitis (IBR/IPV). All dairy and

beef herds are tested on an annually basis. In Sweden, only a few animals with antidotes have

been detected. No animals have displayed any symptoms of the disease. The program aims at

preserving the good health status in the Swedish dairy and beef sector. (Swedish Association

for Livestock Breeding and Production, 1997)

4.3.2.7 Eco Audit

In 1992 the Federation of Swedish Farmers (LRF) initiated an environmental

assessment program, Eco Audit (Miljöhusesyn), to motivate and facilitate the adoption of

quality enhancing features/production practices at farm level. Since 1996 it has been formalised

in the present form. The goal for 1997 is that 75% of the farmers, within the cooperative

SFMMA, would have adopted the Eco Audit. The program concerns the areas of

environmental protection and animal welfare. During 1997 the working environment of the

farmer/farm employees is included as a third area to improve. The primary objective of the

quality program is to, by self auditing, increase the quality at farm level by achieving targeted

standards designed both by the government and the trade organisations. The long run objective

of the Eco Audit is to develop an environmental leadership and hopefully to provide the

foundation for ISO 14000 certification at farm level. In order to evaluate the possibility of the

mentioned ISO certification, a test project involving 30 farms was initiated during 1997.

(Federation of Swedish Farmers, 1995 & Persson, 1997)

The Eco Audit includes a 57 check point list in the areas of:

16 Besides the control program, Scan Avel, operates a breeding program and insemination activities exclusivelyfor farmers producing for the co-operative.

67

• decreasing the risks of pesticides and nitrogen/phosphorous leakage in the

crop production

• animal keeping, animal welfare (e.g. approval of barns, supervision,

environment/hygiene etc.)

• use of medicines

• feed

• handling of carcasses

• infection control

• improved material and disposal handling

• worker environment (Federation of Swedish Farmers, 1995).

4.3.2.8 Scan Avel- a co-operative company with breeding program for pigs

Scan Avel is a co-operative company specialising in pig breeding. The mission of

Scan Avel is to improve breeding practices in order to promote genetic capacity associated

with production, fertility, durability and meat quality. Scan Avel has developed a breed called

Scan H. Scan H is a crossing between a Hampshire boar and a Scan Hybrid sow. The sow is a

crossing between Yorkshire sow and Lantras boar. Hence, the Scan H is a three breed pig and

regarded as the first breed of pig that almost completely lacks a disposition for stress.

Mortalities during transports have almost been eliminated. Almost all Scan producers engage in

this breeding program and about 80-85% of the slaughtered volume within the Scan group

stems from this three breed pig. The Scan H pigs are successfully exported. (Scan Avel, 1997;

Jonsson, E., 1997)

4.3.2.9 Avels Poolen- the non co-operative breeding program for pigs

Avels Poolen is a breeding company owned by ten private or investor owned

slaughter companies. The owners are members of the Swedish Meat Trade Association. Avels

Poolen has developed a breed which is a mixture between a pure bred Duroc boar and a

Lantras and Yorkshire sow hybrid. Almost all non co-operative producers take part in this

breeding program and most of the slaughtered volume within the non co-operative slaughter

originates from this three breed. Pork from this breed is often labelled Sweedham at retail level

but some slaughter companies use their own brands. (Larsson, L-E., 1997)

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4.3.2.10 Beef breeding (Swedish Association for Livestock Breeding and Production)

The beef breeding program in Sweden is conducted by Swedish Association for

Livestock Breeding and Production (SHS) and the member organisations. There are two

different kinds of breeding programs, one for dairy cows and one for beef breeds. Most of the

Swedish beef originates from dairy productions. Hence, the breeding strategies in dairy,

besides milk yield, fertility, durability etc. also aims at enhancing growth capacity and other

important attributes of beef production. The bull stations Svensk Avel and Skåne semen select

and buy bulls satisfying various forms of productive and quality attributes measured through a

breeding index. The breeding programs relies on the recording activities operated by SHS, the

milk recording and beef cow recording called KAP. These databases form one of the

foundations for a proper selection of bulls to be tested. Selected bulls are then subject to

monitoring and an evaluation process based on a number of criteria. The Swedish and

Scandinavian breeding programs are special in the sense that they do not only consider

production criteria, i.e. growth rate and dairy yield. In addition, health attributes such as

fertility, calving qualities and disease resistance are also taken into account. This is possible

through the use of recording data from a comparatively large group of 100-150 daughters from

each of the bulls, compared to 50-60 in many other countries. A larger group improves the

statistical accuracy when evaluating specific production and quality attributes of an individual

bull. A large group is also essential to be able to take previously mentioned health qualities into

account in the breeding program. The sperm is evaluated and produced by the bull stations and

then distributed to the individual farmers mainly by the Livestock co-operatives, which are

members of the SHS. According to the Swedish legislation (SJVFS 1994:99) animals with

established traits of high degree of disease incidence, calving problems or a high percentage of

dead calves are not allowed to be used as breeding animals. (Svensk Avel, 1996 & Swedish

Association for Livestock Breeding and Production, 1997)

4.3.2.11 The producer price- slaughter companies guide meat quality

The slaughter companies attempt to induce a steady supply of quality meat

through producer prices. As described in section 2.1.3, cattle carcasses are graded according

to the EUROP system and fat content. Pig carcasses are graded only according to the meat

percentage as described in 2.2.3. In the table below examples are given of the relative price

69

differences for beef and pork between some of these grades. As can be noted in Table 32, even

minor deviations from established norms result in substantial discounts of the producer price.

Table FF Examples of price premiums for different qualities of meat (May 1997)

Beef record, Young bullsEUROP classes E U R+ R R- O+ O O- P+ P275-299,9 kilograms 0 -4,8% -7% -8,6% -9,4% -9,8% -11,4% -13% -17% -24%

250-274,9 kilograms 0 -4,8% -7,1% -8,7% -9,5% -9,9% -11,5% -13,1% -17,2% -24,2%

Fat groups 02 06 08 10 12 14 17 21SEK/kg deducted -1,5 0 0 -0,40 -1 -2,5 -3,8 -6,7

***************************************************************Pork records, Fattening pigs*

% of lean meat 65% 63% 60% 58%61- 92,9 kilograms 0 -1,3% -3,2% -7%

* The records refer to BIS fattening pigsSource: Record of Scan Farmek prices 5/5-11/5 1997 in Land-Lantbruk, no. 19, 1997.

4.3.2.12 Scans Animal Welfare Program-The quality policy declaration of the co-operative

Within the co-operative, the strive towards better quality in meat production was

initially formalised when the Scan group in 1985 adopted an eight point program to ensure

improved animal care/welfare. The program was designed to form an agenda for the future

work towards improved animal welfare in the production. This policy program has been the

basis in the development of the Environmental and basic quality program and the BIS

program. This agenda includes, healthy breeding practices, procurement promoting animal

health, contracts that reward good animal health care practices, control systems to detect

problems at farm level, counselling and information regarding improved breeding,

sound/healthy foraging, R & D for better animal care and lenient handling in animal transports.

(Scan, 1995).

Scan has developed a regulatory system for transporting livestock. The

preparation of the animals at farm level prior to transport is regulated in the Environmental

and basic quality program and the BIS programs. Transportation personnel is continually

educated about the EU regulations and the Scan animal welfare regulations. This education

aims at increasing the knowledge of animal behaviour and animal handling. The trucks are

randomly inspected in order to determine whether they satisfy certain animal welfare criteria.

Currently, a transport quality program is being developed. The program will include an annual

inspection of every truck from an animal welfare perspective. (Brendov, 1997)

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4.3.2.13 Environmental and basic quality program - A quality program for pork, beef and lamb

From Scan’s Animal Welfare Program a quality program called Environmental-

and basic quality program or BAS (Miljö- och baskvalitetsprogram) was developed. Scan’s

Animal Welfare Program was generated from a general debate about animal husbandry,

antibiotics and carcasses. The BAS program represented another step towards the quality

policy defined in The Animal Welfare Program. BAS is a quality program at the farm level for

production of pork, beef and lamb. The objective is to sustain a good quality standard

concerning: animal care, disease control, animal health care, feed and outer environment

through self-control. All members of the co-operative organisation participate in this quality

program, since it is a requirement for delivery to the Scan group. Compliance to the quality

program is based on self monitoring. The program requires that the producer complies with the

following:

• Scan’s demands regarding animal care (concerning breeding, animal handling,

shaping of the barns, outdoor stay etc.),

• the rules of the Swedish Farmers Disease Control Program (SDS) regarding

imports,

• Scan’s requirements regarding animal health care (e.g. treatment of sick and

injured animals, participation in various health/recording/eradication

programs, the use of medicine, castration of pigs etc.),

• Scan’s regulations concerning feed (hygiene requirements, regulates the use of

certain substances and access to water etc.),

• Scan’s regulations regarding the effects on the environment exterior to the

production unit (such as nutrient leakage, re-cycling, use of fuels, application

of chemical products etc.) and

• finally, at each time of delivery provide a written assurance that the above

rules have been complied with and that the animals were born and raised in

Sweden. (Scan, 1995)

All farmers that deliver to Scan are obliged to participate in the Environmental-

and basic quality program (and fulfil all but the requirements concerning the exterior

environment, although this is about to become compulsory). This fact implies that 75-80% of

Swedish pork and meat production fulfil the conditions stated in the Environmental- and basic

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quality program. The costs are relatively small. The program does not use any particular label,

but the Scan trademark benefits from the program since it is mandatory. (Brendov, 1997 &

Scan, 1995)

4.3.2.14 BIS- A quality security scheme for pork and beef

In 1994 the Scan group developed an enhanced quality system called BIS for

pigs. This is an extension of the BAS program mentioned above and includes a certification of

the farms. The system defines detailed regulations for

• breeding (requiring e.g. that the Scan H model should be used, that a

minimum number of gilt litters per batch of sows should be obtained, that

recruitment should be made through the co-operative slaughter associations,

that the recruitment plan should be approved by the slaughter associations,

that breeding should be documented etc.),

• animal health (e.g. that a health plan and a treatment plan has to be developed,

the rules for infection protection has to be adhered to, stipulates how

medicines should be stored and how health controls should be conducted

etc.),

• forage (which e.g. stipulates maximum level of fish meal and bio-feed,

regulates the use of minerals and antibiotics, regulates handling and storage,

stipulates hygiene rules, requires documentation of the feed used etc.),

• the design of buildings and logistic system within the farm buildings (these

requirements concern e.g. sectioning, space, windows, bedding, loading area,

noise, alarm, water supply, environmental tests of air, ventilation and heat,) &

• overall management practices at the farm (stipulates that all production should

be contracted, include extensive requirements of animal husbandry practices

and hygiene etc.).

All farms are certified and an annual revision is conducted. Documentation is a

central part of the BIS program. Advisors, veterinarians, authorised environmental technicians,

BIS authorised auditors etc. are involved in enforcing the BIS program. (Scan, BIS-

kvalitetssäkrad Piggham, 1996) Since the start in 1995, the volume of pork produced

according to the BIS program has increased rapidly. In march 1996 25% of the volume

produced within the co-operative was produced according to BIS. By October 1997, more

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than 40% of the pork meat slaughtered by Scan, equivalent to more than 30% of total Swedish

pork production, was produced subject to the conditions stipulated by the BIS program. The

objective is to increase the participation rate to 55% of pork meat produced, i.e. the total

demand for the high quality Scan brand Piggham, which is assumed to be achieved during

1998. The pork meat produced according to BIS was launched on the consumer market during

1997 labelled Piggham. The benefits are expected to exceed the costs to the farmer since the

producer price is higher. Efficiency gains are also expected as a result of the program.

(Brendov, 1997).

In 1996 an equivalent quality system for beef called BISNÖT was launched. It

emphasises similar areas as for pork. The short term goal is to incorporate all producers of the

high quality brand Scan Gourmet, which is the consumer brand of Scan for Swedish meat from

beef breeds such as Hereford, Charolais etc., into the program. In the long run Scan aims at

only producing beef from producers participating in the program. (Svensson, 1997; Scan,

BISNÖT-kvalitetssäkrad Scan Gourmet, 1996)

Since the structure of the beef production is more fragmented than the pig meat

production, the adoption rate is expected to be slower. The problem is that the majority

(almost 75%) of the beef producers deliver less than 10 cattle per year, i.e. the beef production

is not a main source of income. The program is too recent in order to assess success or failure.

Since Scan considers quality security schemes to be essential for the future, the pertinant

question is rather when than if the program will be adopted fully. (Lindell, 1997)

4.3.2.15 Non co-operative quality security schemes at farm level- Swedham plusInterviews conducted with industry representatives reveal a plausible trend in the

private slaughtering industry towards tightening the control of the primary level through some

kind of certification. The reason for certifying primary production is partly that it is easier to

effectively monitor the input, and accordingly to protect the trademark. However, it is

noteworthy to observe that efficiency gains can be achieved through closer relations and

improved documentation. One example of these efforts is the company specific program

Swedham plus at Skövde slakteri. 1-1.5% of the Swedish market for pork is annually certified

according to Swedham plus. This corresponds to 30-40% of the volume of Skövde slakteri.

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4.3.2.16 ISO certification

Certification according to ISO is still unusual in the meat marketing chain in

Sweden. Practically no pork or beef producer has been certified according to the ISO 9000 or

ISO 14000 requirements. Federation of Swedish Farmers starts a project during 1997 to

examine the possibilities of ISO 14000 certification at farm level (see section on Eco Audit). In

the poultry industry ISO certification is rare but one of the hatcheries has been certified.

4.3.2.17 The Swedish Poultry Meat Associations Animal Welfare Program

In 1987, Swedish poultry consumption dropped significantly following the media

reports concerning campolybacter. As a result, the poultry industry initiated a number of

consumer surveys which revealed that people had a very negative view of the poultry sector. In

response, among other things, the industry started The Swedish Poultry Meat Associations

Animal Welfare Program (Djuromsorgsprogrammet). The program constitutes an annual

evaluation of all farms based on a set of criteria. The evaluation forms a basis for grading

poultry barns which then determines the permitted density in each barn.

The Swedish Poultry Meat Associations Animal Welfare Program is a quality

program for the poultry sector developed in co-operation between the Swedish Board of

Agriculture and the industry. The program regulates:

• the livestock areas (heat, feed, water, ventilation equipment, light, material

and design of the interior of the building, storage of feed, manure, litter etc.)

• the farm building areas (hygienic barriers, electrical equipment, alarm etc.) and

• animal keeping/care (animal keeping, hygiene, air quality, documentation,

slaughter quality, handling of dead chickens etc.).

Legislative requirements form the minimum standards but a number of additional

criteria are also evaluated. The program regulates the design and use of farm buildings,

equipment and the managerial practices implemented at the production level and transports. In

addition slaughtering is monitored by slaughter companies.

The evaluation of the poultry barns is conducted by a National Standards Officer

(rikslikare), and veterinarians from the Swedish Board of Agriculture. The evaluation of each

facility forms a basis for grading the poultry barns. The task of the National Standards

Officer (rikslikare), appointed by the Swedish Poultry Meat Association, is to ensure a uniform

national standard. Depending on the grade the maximum allowable density of chickens in the

74

barn is determined. As long as the producers fulfil the legislated requirements they are allowed

to maintain 20 kg of chicken per square meter. A high score in the evaluation provide the

farmer with permission to keep up to 36 kg/m2. Hence, The Animal Welfare Program has

features of a dynamic quality enhancing program that rewards producers that achieve a high

level of quality in production. As mentioned in chapter two, 75% of the total poultry barn area

permits 34 kg of chicken or more per square meter. Almost all poultry producers participate in

The Animal Welfare Program. (Carlström, 1997)

The Animal Welfare Program has been successful both concerning the

adoption/implementation of the program among producers and regarding addressing the

problem of declining consumption due to the negative public perception of poultry. The co-

operation between the Swedish Board of Agriculture and the industry has created a dynamic

program and reduced the benefits/possibilities of free-riding behaviour. Consequently almost

the entire industry has joined the program, which in turn facilitates achieving the ultimate goals

of animal friendly production and a positive view of the poultry industry by the consumers and

the media. At the first classification, only 65% of the chicken barns were approved, two years

later 97% were approved. (Littorin, 1993). A producer that does not join the program, still has

to be evaluated in order to increase the density of chickens per square meter in excess of 20.

Since the policy incorporate a dynamic aspect rewarding ”good” production practices, the

density of chickens in the primary production has steadily increased . This can be regarded as

evidence that costs of the policy are relatively small, i.e. that the benefits exceed the costs.

The surveys conducted in 1987 revealed that consumers had a negative view of

poultry, both because of the media attention on food diseases but also because of a general

perception of the poultry industry of not being animal friendly in the production. (Lagergren,

1991) Although the policy does not involve any special labelling, information and positive

media attention has turned the consumer view of poultry from negative to positive. The

consumption has since the drop of 1987 increased with 5-15% per year which means that

consumption has more than doubled in 10 years. More recent surveys reveal that consumers

view poultry meat more positive than before. (Carlström, 1997)

The Campolybacter program is a concern for the entire industry. The programme

is not communicated to consumers through labelling but it has been successful in view of the

Campolybacter having decreased substantially in a relative short period of time. However, the

last 10% of the Campolybacter bacteria seems very hard to exterminate. (Carlström, 1997)

75

4.3.2.18 The Animal Welfare Program of Kronfågel

Kronfågel, which is dominating the market, has their own animal welfare

program (Kronfågels djuromsorgsprogram). In the aftermath of the debate concerning

campolybacter during the 1980’s and the subsequent substantial drop in consumption,

Kronfågel developed an animal welfare program. This program was later introduced to and

basically adopted by the entire industry as The Swedish Poultry Meat Associations Animal

Welfare Program. Since then, Kronfågel has further developed their program to include the

downstream stages of the food marketing chain. The program has developed gradually and

been formalised during the last two years. Since Kronfågel considers the quality program a

competitive advantage, they are not willing to reveal any details of the program. Contrary to

The Swedish Poultry Meat Associations Animal Welfare Program, The Animal Welfare

program of Kronfågel includes labeling with a specific symbol with some attached information.

As previously mentioned, Kronfågel also label their fresh products with

information about the producer, e.g. a picture of the producer, phone number and the name of

the farm.

4.3.2.19 Campolybacter Control Program

As a consequence of the negative publicity in the media during the 1980’s the

poultry industry engaged in combat against the campolybacter bacteria by both financing

research and by implementing a control program. The program was partly based on the

Swedish salmonella control program which consisted of three major parts namely;

1) to ensure that grand parent and parent flocks are free of the disease

2) heating the feed and

3) hygienic measures at farm level.

The hygienic measures are the most important features for eradicating the

campolybacter in the broiler barns. Some of the most important hygienic measures are the

following: hygiene barriers for staff members (change of clothes and shoes), no outside visitors

are allowed, all-in all-out policy, scaling the barns against vermin etc. The industry operated

control program started in 1990/91 and is aiming towards a production totally free of

campolybacter. The Campolybacter Control Program includes sampling of cloacal swabs from

every flock delivered for slaughter. Laboratory tests are conducted in a laboratory at the

76

Swedish University of Agricultural Sciences. Results of the samples are sent to the abattoirs,

the local farm veterinarian and the Swedish Poultry Meat Association. Results are also

submitted to the farm in order to provide feedback regarding the status of hygienic routines at

farm level. The program is financed through levy on every slaughtered chicken. Following the

enactment of The Animal Welfare Program and the Campolybacter Control Program the

percentage of campolybacter contaminated flocks has decreased from about 17% in a study in

1988 to 12% in 1993 and 9% in 1996. A major share of the observed decrease is attributable

to The Animal Welfare Program. (Berndtson & Engvall, 1994; Berndtson, 1997; Carlström,

1997)

4.3.3 Slaughtering/Processing

4.3.3.1 ISO certification

Certification according to ISO is still unusual in the meat marketing chain in

Sweden. At slaughter level one of the co-operative associations within the Scan group,

Farmek, completed the ISO 9001 certification of one plant in Skara in 1996.17 At the meat

processing level, Farmek in Skara and two other companies are certified according to ISO

9001. (ISO Guide 1997, 1997) Interviews conducted with representatives of the slaughter and

meat process industry reveal that one of the main reasons for planning to adopt ISO are, that

the company believes that some customer will require the certification in the future (some of

the larger process industries already require ISO certification). Another reason is that the

efficiency gains attributable to a certification are considered to be substantial. According to the

statues of the ISO programs, use of ISO-certification when labelling the products is not

allowed. A substantial proportion of the industry is planning to adopt ISO in the future. There

appears to be a tendency that larger companies perceive ISO as more important then the

smaller companies do.

The co-operative are planning to certify all plants according to ISO 9000

although most of the Scan group at present is occupied adjusting to the new regulatory system

and the changing market situation as a result of the Swedish EU membership. Customers at the

processing, wholesale or retail level do not generally require ISO certification as of today. Scan

assumes that this situation will change in the future although the presumed efficiency gains

attributable to ISO certification are considered one of the major rationales for adopting ISO.

77

Accordingly, the Scan group plans to certify all their slaughter plants although not

immediately. (Larsson, P., 1997; Karlsson, 1997; Svensson, 1997; Nykvist, 1997)

4.3.3.2 EMAS

No meat companies in Sweden have yet introduced EMAS. The Scan group plans

to introduce EMAS in the future. They consider ISO certification as a step towards EMAS.

However, there is one feed plant (HBK Lantmän, Falkenberg) that has been certified according

to EMAS. (ISO Guide1997, 1997)

4.3.4 Retail

The major retail chains have various forms of quality programs regulating the

commercial relations with their own suppliers. Generally, these programs serve as a direct

insurance for the retailers (wholesalers) and only indirectly as an assurance for the consumers.

These forms of quality programs are regarded as a competitive advantage by the retailers.

Accordingly, specific features of the programs are not revealed to the public.

4.3.4.1 Hemköp

In 1993 the retail chain Hemköp introduced a quality program. The main feature

of this program is that all meat and meat products (as well as other commodities) should be

produced in Sweden. The quality program includes many other different features at several

levels. Hemköp is not willing to reveal any details of the concept. The program regulates the

production standards and the handling of meat at all levels of the marketing chain. What can be

mentioned is that Hemköp reassures quality upstream the supply chain partly through own

control and partly by reassurance from their partners. They cut about 50% of their meat

products and work only with a few slaughter houses. Since the enactment of the program the

quality concept has been very successful. (Nordman, Hemköp)

4.3.4.2 ICA- Sunda NaturbetesköttThe retail chain ICA has developed a program labelled Sunda Naturbeteskött.

This quality program concerns beef although they have developed something similar for pork.

17 The ISO certification comprise slaughter as well as meat cutting.

78

The beef quality product is called Sunda Naturbeteskött and regulates all production levels.

The program requires the use of environmentally friendly production systems that promote

biological diversity. Simultaneously, the system are to comply with the demands for specific

quality attributes of meat, in particular marbling. One of the basic criterias of the program is

that the meat is Swedish. However, a problem emerges since there is a shortage of supply. The

shortage is partly due to the fact that the program was instigated only two years ago. Almost 3

years are required from the breeding decision until the meat produced is available for human

consumption. A major problem is to recruit Swedish producers who find it economically

worthwhile to produce beef today. The reason the program developed was that imported meat,

complying with product quality such as fat content and marbling, was demanded at a high

price.

The basic idea is to produce beef of the same kind of quality and integrate it with

the attribute of the ”open landscape”. At retail level the meat is labelled Sunda Naturbeteskött

but although demand exceeds supply, the market share is less than 1% of ICA’s total meat

sales (ICA’s market share is about 60% of the Swedish market). One of the major explanations

to why this kind of product hardly has been produced in Sweden is the price system.

Representatives of the scheme believes that meat with the referred quality attributes has the

potential to become a market leader in the future. (Christensen, ICA)

4.4 Integrated standards

4.4.1 KRAV/ekokött - An ecological quality assurance scheme for pork and beef

KRAV is a quality assurance scheme which is vertically integrated through the

cultivation of forage and feed, animal keeping, slaughter and processing and distribution

downstream the marketing chain to the ultimate consumer. Meat products produced according

to the rules of KRAV, are distributed and sold by the economic organisation ekokött (ecological

meat). The meat products produced according to this quality scheme are labelled ekokött

(ecological meat) and KRAV (an ecological label including products other than meat). The

objective of ekokött and KRAV (ecological products in general) is to promote environmentally

sustainable and animal welfare oriented production systems for meat.

Concerning other products, the KRAV standard has been in existence and

demanded for a few years. Including meat in the ecological concept can be perceived as a

natural step. KRAV comprises regulations at farm level regarding animal husbandry practices

and the cultivation of forage and feed, transportation, slaughtering of animals at processing

79

level and marketing of the products including display at retail level. Some of the regulations are

the following:

• Feed should, to at least 90 %, be ecologically produced without the use of artificial

fertilisers, pesticides or other chemically produced substances. A minimum of 50% of all

feed and forage should be cultivated on the farm. A lot of forage should be used in the feed

ration.

• The animals should have the possibility to exercise their natural behaviour. Newly born

animals should be able to suckle. All animals should graze on pasture during summer and

pigs should be on pasture all year around.

• No precautionary medication is allowed. In the event that antibiotics or chemotherapeutics

are used to cure animals, a quarantine period is required before the meat can be sold as

ekokött.

• During transport and at the slaughter house the animals should be treated according to

specific rules designed to prevent stress and to promote animal welfare.

• The meat should be kept separate from other meat through the processing level and be

strictly marked.

• The retailers have to be authorised to pack or re-pack any KRAV products. The KRAV

products should be labelled according to the rules of KRAV. (ekokött, 1995 & KRAV,

1996)

The main problem of ekokött has been that the demand has increased steadily

over time while the supply has increased stepwise. As a result, although the interest both

among consumers and producers is increasing, there has been periods both with excess supply

and excess demand. This has temporarily been a disadvantage for ekokött. Although the level

of adoption has continued to increase since the start of 1993, the market share still remains

small. Approximately 1% of the beef and 0,1% of the pig meat slaughtered volume are

produced in accordance with the KRAV standard and sold through ekokött. (Jonsson, ekokött,

1997)

80

Table GG Swedish quality policy regulatory requirements above general EU regulations- general & specific for pork, beef and chicken.

Farm level Transport Slaughter level Process level Retail level

Productstandards

SLV 1986:131) Definitions on meat and meatproducts



Product &processstandards

Animal protection writ (DF)1) Antibiotics and hormonesallowed only in case of disease

Processstandards

Law on animal protection (DL)1) Animal keeping designed topromote health and protectanimals from diseases2) Surgical operations generallyonly allowed for medicalpurposes

Law on animal protection (DL)1) Animal keeping designed topromote health and protectanimals from diseases

Law on animal protection (DL)1) Animal keeping designed topromote health and protectanimals from diseases

Animal protection writ (DF)1) Barns and equipment has tobe approved beforehand

Processstandards

SBA regulationsabout animal keeping etc.

(FAR)Processstandards forpigs

1) Maximum no of pigs, shapingof barns2) Animal keeping3) Shaping of compartments

SLVFS 1996:321) Regulates the salmonellacontrol program

Processstandards forcattleproduction

1) Specifies varying minimumareas for cattle depending onweight (regardless of age)2) Specifies shaping of feed trays3) Regulates the number of cattleper water cup

SLVFS 1996:321) Regulates the salmonellacontrol program

Processstandards forchickenproduction

1) Maximum 20 kg/m2 unlessapproved (up to 36 kg/m2)2) Specifies minimum areas forchickens at feeding and watertraySJVFS 1994:92/931) Regulates the salmonellacontrol program for chicken

SLVFS 1994:11/1995:71) Regulates the salmonellacontrol program for chicken

81

Table HH Pork and beef- Voluntary quality policy

Farm level Transport Slaughter level Process level Retail levelProcessstandards

BAS- Environmental and basicquality program:1) animal care2) infection control3) animal health care4) forage req.5) assurance at each delivery thatthe rules are obliged to

Scan transport quality program

BIS- Scan quality assurancescheme includes requirements on1) breeding, 2) animal health,3) forage, 4) building and5) overall managementSwedham plus- An example ofnon-cooperative qualityassurance scheme at farm level.Requirements similar to BIS.Eco Audit (Miljöhusesyn):program to fulfil legislative &sector requirementsSwedish Association forLivestock Breeding &ProductionPromote animal health throughe.g. recording programsThe Swedish Animal HealthServicePromote animal healthEradication programs

ISO-certification:One plant certified according toISO 9001

ISO-certificationThree Co. certified according toISO 9001

ISO-certification:One Co. certified according toISO 14001

82

cont. Table 35 Pork and beef- Voluntary quality policyFarm level Transport Slaughter level Process level Retail level

Process &productstandards

Swedish Farmers DiseaseControl Program :Regulates imports

Hemköp:Sells only Swedish meat

KRAV/ekokött (Ecological meat):Aims at environmentallysustainable & animal friendlyproduction systems1) Feed ecologically prod.,pasture during summer...2) No chemical fertiliserspesticides etc.3) Promote natural behaviour ofanimals4) etc.

KRAV/ekokött(Ecological meat):Aims at environmentallysustainable & animal friendlyproduction systems1) Animal treated to minimisephysical and psychologicalpressure & promote animalwelfare

KRAV/ekokött: Aims atenvironmentally sustainable &animal friendly productionsystems1) Animal treated to preventstress & promote animal welfare2) Veterinary inspection prior toslaughter3) Meat kept apart from othermeat in the slaughter plant4)Regulates anaesthesia,resting..

KRAV/ekokött (Ecological meat):Aims at environmentallysustainable production systems

1) Regulates handling,processing and storing2) Regulates content andlabelling3) Regulates additives andprocessing

KRAV/ekokött(Ecological meat):Aims at environmentallysustainable production systems

1) Regulates handling2) Regulates labelling3) Regulates exposure for sale

Pig specific Pig BreedingScan Avel & Avels Poolen

Beef specific KAPBreeding program (SwedishAssociation for LivestockBreeding & Production)

Beef specific Sunda Naturbeteskött ICA: Special BeefSunda Naturbeteskött

83

Table II Chicken- Voluntary quality policy chicken

Farm level Transport Slaughter level Process level Retail levelProcessstandards

The Animal Welfare Program(Djuromsorgsprogrammet.)Regulates1) Livestock areas2) Farm building areas3) Animal keeping/careISO- certification:One of the hatcheriesEco Audit (Miljöhusesyn):See previous tableThe Swedish Animal HealthService(SvenskaDjurhälsovården)See previous tableThe CampolybacterProgramRegulates testing and production

Process &productstandards

KRAV/ekokött (Ecological meat)See previous table

KRAV/ekokött (Ecological meat)Evaluated and accepted byKRAV in each case

KRAV/ekokött (Ecological meat)Evaluated and accepted byKRAV in each case



The,Association for PoultryDisease ControlRegulates imports

HemköpSells only Swedish meat

84

5 Concluding remarks

An examination of historical Swedish data of the developments of meat

consumption and production patterns reveals no drastic changes during the last 20 - 30 years.

A noticeable increase in the consumption of pork and poultry can be observed. This tendency

should be interpreted in view of a rather low Swedish poultry consumption compared to other

countries.

Agricultural policy developments have been quite turbulent from the beginning of

the 1990's and onwards. A major deregulation of Swedish agricultural policy was instigated in

1990. However, due to the Swedish membership application to the EU in 1991, the

extraordinary change in the agricultural policy environment never materialised. Irrespective of

these developments, real producer prices have fallen over a period of time with an accentuated

drop in 1995 due to the immediate adjustment to the Common Market. As of 1996 the degree

of self-sufficiency amounted to 103 % in the pig sector. Imports play a substantial role in the

beef sector where the degree of self-sufficiency was no more than 82% in 1996.

An important feature of the Swedish beef and pig industry is the comparatively

dominant role of the co-operative organisations. The co-operatives are organised through the

umbrella organisation Swedish Farmers Meat Marketing Association. Co-operative companies

prevail in the food marketing chain downstream to the processing level. They play a major role

in slaughter and processing industry. The co-operatives account for 75-80 % of the slaughtered

volume, but the market share decreases to 50 % and 35% in the meat cutting and processing

industries respectively. At retail level a high level of concentration can be observed. Three

conglomerates account for 67% of the retail convenience goods volume, and an even higher

market share regarding food items. 77% of the retail volume is marketed through

super/hypermarkets.

No co-operatives exist in the poultry sector. At slaughter level one company

dominates with a market share exceeding 50%. The remainder of the industry is more

fragmented. At the primary producer level the poultry industry is less concentrated although

characterised by fairly large sized operations. Most of the poultry industry (hatcheries,

producers and slaughter industries etc.) are organised in a joint interest organisation, Swedish

Poultry Meat Organisation.

Since the mid 80's quality issues in the public debate and media reports have

largely centred around animal welfare issues. Sweden does not have any strong consumer

85

organisation. Instead the media, politicians and producers have been the key actors while

focusing on animal welfare quality attributes. Since Sweden became a member of the EU in

1995 there has been an even more pronounced tendency towards focusing on animal welfare.

The enhanced focus on the animal well-being, following the EU-membership may partly be

considered as an attempt to differentiate Swedish products from increasing foreign

competition.

Animal welfare may largely be perceived as a process standard since the rather

stringent Swedish regulations to a large extent concern technology and management practices

applicable in the production process. General laws are formed by the Swedish parliament.

Detailed regulations are provided by The Swedish Board of Agriculture but supervision to a

large remains the responsibility of local Municipal Environmental Committees. The process

standards relating to animal welfare are implemented through governmental regulations as well

industry induced quality programs. The co-operatives have been initiating extensive quality

programs where especially the BIS and BAS programs concerning pork ought to be

mentioned. BIS is the most advanced program and as of 1996 35% of the volume of pork

produced was subject to these process standards.

Product standards to some extent relate to animal health issues. Extensive

government regulations exist as to how the prevention and incidence of animal diseases are to

be handled. Besides adhering to governmental product standards, the industry in collaboration

with public authorities engage in animal health enhancing and disease prevention activities.

Some of these activities are operated by The Swedish Animal Health Service for pigs and

cattle. The use of antibiotics is only allowed for the purpose of curing disease or to reduce the

symptoms of disease. The use of hormones in order to stimulate growth, increase feed

efficiency or otherwise alter the product attributes is not allowed. Hence, these health service

organisations play a vital role in order to reduce the incidence of animal diseases in Swedish

agriculture. An important part of these programs is the Swedish Farmers’ Disease Control

Program attempting to prevent the spread of salmonella through imported live animals. This

programs is of utmost importance for the poultry industry. In the poultry industry, The Swedish

Poultry Meat Associations Animal Welfare Program, promote both the animal health and

animal welfare. The Association for Poultry Disease Control is organised with the primary

objective of preventing the spread of contagious disease through imports. This program is

operated by the poultry industry.

86

Detailed process standards concerning human health/food safety issues

associated with handling of meat and meat products from slaughter and downstream the meat

marketing chain remains the responsibility of the National Food Administration. However,

supervision at the retail level is to a large extent organised through the local Municipal

Environmental Committees.

A market for ecologically or alternatively produced beef and pork is emerging. A

leading product label as well as an integrated product and process standard is represented by

the KRAV organisation. The standards defined by KRAV represent all levels of the food

marketing chain including retail level. Other ecologically oriented programs exist but they do

not integrate the standards to the same extent as KRAV. A consumer survey in 1994 showed

that 12% of the consumers often by products labelled KRAV and 19% buy these products

sporadically. Although the market for ecologically produced products is increasing the

observed market share remain well below 10% for any product.

87

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Statistics Sweden (SCB), 1990. Foreign Trade 1989. Imports and exports. Commodities according to theHarmonized System. Örebro, Sweden.

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Statistics Sweden (SCB), 1993. Foreign Trade 1992. Imports and exports. Commodities according to theHarmonized System. Surte, Sweden.

Statistics Sweden (SCB), 1995. Foreign Trade 1994. Imports and exports. Commodities according to theHarmonized System. Surte, Sweden.

Statistics Sweden (SCB), 1994. The Family Food Expenditure Survey 1992- Final report. Örebro, Sweden.

Statistics Sweden (SCB), 1974-1995. Statistical Yearbook of Sweden, Various issues 1975 - 1996. Stockholm,Sweden.

Statistics Sweden, Yearbook of Agricultural Statistics, Various issues 1975 - 1996. Stockholm, Sweden.

Stenson, H., 1997. BSE. Konsument- och politikerreaktioner. Risk eller ej? Hotas djur- och folkhälsan av en nytyp av smittämnen?, Kungliga Skogs- och Lantbruksakademiens Tidskrift, årg 136, no 3, pp 15-32. Stockholm,Sweden.

Swedish Association for Livestock Breeding and Production (SHS), 1996. Årsredovisning 1995- SvenskHusdjursskötsel. Sweden.

Swedish Association for Livestock Breeding and Production (SHS), 1997. Knowledge for the 21st Century.Sweden.

Swedish Board of Agriculture, 1993.- Svensk djurskyddslagstiftning i EG-perspektiv- Jämförelse mellan svenska gällande bestämmelser, EG:sdirektiv och gällande bestämmelser i ett antal EG-länder. Rapport 1993:21. Jönköping, Sweden.- Svensk djurskyddslagstiftning i EG-perspektiv. Bilaga till Rapport 1993:21. Jönköping, Sweden.

Swedish Board of Agriculture. 1983-1997. Journal of Agricultural Economics (JordbruksekonomiskaMeddelanden).- 1983:7/8. Jönköping. Sweden.- 1990:11. Jönköping. Sweden.- 1991:11. Jönköping. Sweden.- 1994:4. Jönköping. Sweden.- 1994:11. Jönköping. Sweden.- 1995:4. Jönköping. Sweden.- 1996:1. Jönköping. Sweden.- 1996:3. Jönköping. Sweden.- 1996: 6. Jönköping. Sweden.- 1997:7/8. Jönköping. Sweden.

Swedish Farmers Disease Control Program (Svenska djurbönders smittskyddskontroll). Smittskyddskontroll-Import- Nu är det bondens ansvar. Booklet. 1994. Sweden.

Swedish Farmers Disease Control Program, 1995. Svenska djurbönders smittskyddskontroll - Stopp förimportsmitta. Regler för Import. Smittskyddskontroll- Import nu är det bondens ansvar. Booklet. Sweden.

Swedish Farmers Meat Marketing Association (SFMMA), 1995. Årsredovisning for Slakteriförbundet 1994.Stockholm, Sweden.

Swedish Farmers Meat Marketing Association (SFMMA), 1996. Årsredovisning for Slakteriförbundet 1995.Stockholm, Sweden.

Swedish Farmers Meat Marketing Association (SFMMA), 1996. ”Animaliskt foder till nötkreatur och grisar-vad gäller i Sverige?” Information from SFMMA. Memo. 1996-04-11. Stockholm, Sweden.

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Swedish Poultry Meat Association, 1996. Svenskt Fågelkött 100% Salmonellafritt. Pressmeddelande 1996-10-04. Swedish Poultry Meat Association. Sweden.

Svensk Avel, 1996. Tjurkatalog- 1996. Avkommesbedömda och importer. SRB-SLB-SKB-SJB-Köttraser.Svensk Avel, Lidköping, Sweden.

SOU 1994:112. Konsumenterna och livsmedelskvaliteten- En studie av konsumentupplevelser, Delbetänkandeav Konsumentberedningen 1994. Fritzes, Stockholm, Sweden.

SOU 1996:62. EU, konsumenterna och maten- Förväntningar och verklighet, Betänkande avKonsumentberedningen 1996. Fritzes, Stockholm, Sweden.

Supermarket, 1996. No 6-7, ICA-Förlaget, Västerås, Sweden.

The Swedish Animal Health Service, 1996. Årsredovisning 1995- Svenska djurhälsovården . Sweden.

The Swedish Animal Health Service, 1994. Our aim:”Sound and competitive production of healthy animals”.The Swedish Animal Health Service. Sweden.

The Swedish Animal Health Service, 1995. Årsredogörelse 1994. Svenska Djurhälsovården. Sweden.

The Swedish Animal Health Service, 1996. Årsredogörelse 1995. Svenska Djurhälsovården. Sweden.

Wahlström, P., 1973. Jordbruksprisregleringen, speciellt införselavgifterna och deras fördelning. Report no.2,Department of Economics and Statistics, Swedish University of Agricultural Sciences, Uppsala, Sweden.

Swedish regulations:

SFS (1956:413) Förordning om klassificering av köttSFS (1985:295) Lagen om foderSFS (1971:511) LivsmedelslagSFS (1971:810) Förordning med allmän veterinärinstruktionSFS (1982:1080) HälsoskyddslagSFS (1988:534) DjurskyddslagSFS (1988:539) DjurskyddsförordningSFS (1990:932) KonsumentköplagSFS (1990:1510) Förordning med länsstyrelseinstruktionSFS (1992:859) LäkemedelslagenSFS (1995:1336) Lag om skydd för beteckningar på jordbruksprodukter och livsmedel, m.m.SFS (1996:147) Förordning med instruktion för Statens LivsmedelsverkSFS (1996:148) Förordning med instruktioner för Statens jordbruksverkLSFS (1982:39) Lantbruksstyrelsens kungörelse om bekämpning av salmonella hos djurSJVFS (1989:20) Jordbruksverkets föreskrifter och allmänna rådSJVFS (1991:122) Om klassificering av slaktkropparSJVFS (1993:129) Statens jordbruksverks föreskrifter om djurhållning inom lantbruket m.m.SJVFS (1993:177) Statens jordbruksverks föreskrifter om foderSJVFS (1994:92) Statens jordbruksverks föreskrifter om obligatorisk salmonellakontroll av fjäderfä som födsupp till slaktSJVFS (1994:93) Statens jordbruksverks föreskrifter om obligatorisk salmonellakontroll vid uppfödning avavelsfjäderfä och produktion av kläckägg samt om journalföring vid kläckeriSLV FS (1986:13) Statens livsmedelsverks kungörelse med föreskrifter om köttvarorSLV FS (1993:19) Statens livsmedelverks kungörelse med föreskrifter och allmänna råd om märkning ochpresentation av livsmedelSLV FS (1994:11) Statens livsmedelverks kungörelse om slakt av fjäderfäSLV FS (1995:7) Statens livsmedelverks kungörelse om slakt av fjäderfäSLV FS (1995:20) Statens livsmedelverks kungörelse om tillsyn vid införsel av animaliska livsmedel från annatEU-land

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SLV FS (1995:22) Statens livsmedelverks kungörelse med förteckningar över författningar inomlivsmedelsverkets ansvarsområdeSLV FS (1996:6) Statens livsmedelverks kungörelse med föreskrifter och allmänna råd omlivsmedelSLV FS (1996:15) Statens livsmedelverks kungörelse om ändring i kungörelsen (SLV FS 1990:10) medföreskrifter och allmänna råd om livsmedesltillsyn m.m.SLV FS (1996:17) Statens livsmedelverks kungörelse med föreskrifter och allmänna råd om malet kött ochköttberedningarSLV FS (1996:32) Statens livsmedelverks kungörelse om slakt av matboskap och hägnat viltSLV FS (1996:37) Statens livsmedelverks kungörelse om ändring i kungörelsen (SLV FS 1990:10) medföreskrifter och allmänna råd om livsmedesltillsyn m.m.

EU regulations:

Commission directive 87/250/EECCommission directive 93/102/EECCommission directive 95/42/ECCommission decision 95/50/ECCouncil directive 64/433/EECCouncil directive 77/96/EECCouncil directive 79/112/EECCouncil directive 91/495/EECCouncil directive 91/497/EECCouncil directive 91/498/EECCouncil directive 92/116/EECCouncil directive 93/43/EECCouncil directive 94/65/EECCouncil directive 95/23/EECCouncil regulation 1208/81/EECCouncil regulation 2081/92/EECCouncil regulation 2082/92/EECThe EEA agreement, Appendix 1, section 1.

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Personal messages:

Berndtson, Eva. Kronfågel.Brendov, Erika. Swedish Farmers Meat Marketing Association. (SFMMA).Bergman, Tor. National Food Administration. (NFA).Carlström, Anna. Swedish Poultry Meat Association. (Svensk Fågel).Dahlén, Björn. Swedish Board of Agriculture (SBA).Holmström, Andrea. Swedish Farmers’ Disease Control Program/The Swedish Animal Health Service.Jafner, Britt-Marie. Swedish Association of Livestock Breeding and Production. (SHS)Jonsson, Ebbe. Scan Avel.Jonsson, Håkan. Swedish Board of Agriculture (SBA).Jonsson, Per. Swedish Board of Agriculture (SBA).Jonsson, Sofia. ekokött.Karlsson, L. Scan Farmek.Christensen, Lennart. ICA.Larsson, Anders. The County Administration in Uppsala.Larsson, Lars-Erik. Avels Poolen.Larsson, Pia. Scan Farmek.Lexmon, Åsa. Swedish Farmers Meat Marketing Association. (SFMMA).Lindell, Lars. Swedish Farmers Meat Marketing Association. (SFMMA).Lund, Birgitta. National Food Administration. (NFA).Nilsson, Alf. Swedish Farmers Meat Marketing Association. (SFMMA).Nordman, Mikael. Hemköp.Nykvist, Kurt. Swedish Farmers Meat Marketing Association. (SFMMA).Nyström, Maria. National Food Administration. (NFA).Persson, Sören. Federation of Swedish Farmers. (LRF).Pääjärvi, Erland. National Food Administration. (NFA)Ramvall, Carl-Johan, Swedish Farmers Meat Marketing Association. (SFMMA).Rutegård, Åke. Swedish Meat Trade Association. (SMTA).Sturesson, Håkan. Swedish Meat Trade Association. (SMTA).Sundgren, Jan. Kronfågel AB.Svensson, Bertil. Swedish Farmers Meat Marketing Association. (SFMMA).Warén, Niklas. ICA.Widell, Margareta. National Food Administration (NFA).Åkerberg, Anders. National Food Administration (NFA).

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