Volume 10: Economic Impact and International Trade
7. Exports of MBM and compound feed, gelatine, tallow and medicines
MBM and compound feed
Introduction
Export to EU Member States
Export of MBM to non-EU countries

Introduction

7.2 The evidence received by the Inquiry about the export from the UK of MBM and animal feed containing MBM suggests that the market for such products was small in the period before the emergence of BSE. Although exports of MBM to EU countries were rising steadily in the period from 1979 to 1988, total exports of MBM in 1988 were still less than 15,000 tonnes. ¹ This represented less than 4 per cent of the UK production of MBM in that year, based on MAFF estimates that annual production of MBM in the UK was about 400,000 tonnes. ²

7.3 The Inquiry sought evidence from witnesses representing the feed industry about the extent of exports of MBM and compound feeds containing MBM. Mr Robert Peck of the Grain and Feed Trade Association (GAFTA) told the Inquiry

. . . Prosper De Mulder had the lion's share of UK produced meat and bonemeal exports, being the biggest producer. We, at rare times, exported cargos or truckloads of meat and bonemeal. By and large there was a deficit in the UK of meat and bonemeal. It was only on rare occasions that there was sufficient to warrant the additional cost to make it attractive to a third country outside of the UK. ³

7.4 Mr Paul Foxcroft, on behalf of Prosper De Mulder Ltd, the largest rendering company in the UK, said the following in one of his statements:

PDM did export MBM to Europe and other countries (mainly Indonesia, Thailand and Sri Lanka) after the emergence of BSE.

The MBM was for use in poultry or pig feeds and post-September 1990 was produced from non-SBO raw materials.

The quantities exported represented a small proportion of PDM's total MBM sales (approx. 5%) and were at prices compatible with those on the home market. ⁴

7.5 Mr David Goldwater of GAFTA explained that MBM exports 'would primarily go to manufacturers of concentrates who would use the meat and bonemeal in that particular end ration, and most of those concentrates would then be re-exported from either Belgium, Holland or France to the Middle East or North Africa'.

7.6 As regards the export of compound feed, Dr Brian Cooke, a nutritionist employed by Dalgety Agriculture Ltd told the Inquiry: 'There is really very little export of compound feeds, if any. In the ruminants area any export is usually in the specialist broiler area or something like that, not in cattle feed. ⁵

7.7 Mr David Goldwater, when asked about trade in compound feedstuffs containing animal protein, told the Inquiry: 'There would be the odd container load of finished feed that might go to one of the African countries or to the Middle East but absolutely no quantity at all. It would be minuscule in the context of the total feed trade.' ⁶

Export to EU Member States

7.8 In Chapter 3 we discuss the impact of the introduction of the ruminant feed ban on the domestic rendering and feed manufacturing industries. The ruminant feed ban prohibited the inclusion of ruminant protein in ruminant rations. The practical effect of the ban was to exclude the use of any MBM in ruminant rations, since renderers were generally unable to guarantee that MBM produced by them was completely free of ruminant protein.

7.9 As already mentioned, MAFF estimated that UK production of MBM was approximately 400,000 tonnes per annum. Of this it was estimated that about 12 per cent of the domestically produced MBM had gone into ruminant feed before the introduction of the ban. ⁷ After the imposition of the ban renderers would therefore have needed to find new markets for a significant proportion of their production. In evidence Mr James Reed, Director-General of the UK Agricultural Supply Trade Association (UKASTA), was asked if any companies might have continued to produce ruminant feed containing MBM for the export market. He stated:

I do not think it would have been worthwhile to any company to do that, because the export trade simply was not big enough in any compound feedingstuff. ⁸

7.10 Dr Cooke's and Mr Goldwater's comments have been noted above.

7.11 Although it appears that MBM would not have been included in compound feed for ruminants for the export market, there was a marked increase in exports of MBM from the UK in 1989. ⁹ In July 1989 Mr Lawrence, from the Animal Health Division of MAFF, wrote:

The rendering industry has survived the July 1988 prohibition [the ruminant feed ban], in part because they have been able to fill the gap in the market through exports. In 1988 exports to other Member States were worth £2.2 million. In the first quarter of 1989 it was £1.9 million . . . ¹⁰

7.12 In spring 1989 concern about UK exports of MBM began to be expressed within the EU. Nevertheless the Commission at that stage saw no need for direct intervention and no justification for restrictive trade measures.

7.13 On 22 June 1989 Mr G Legras, Director-General of the Agriculture Directorate (DG VI) of the European Commission, sent a telex to the UK Government requesting an assurance that ruminant products would not be used in ruminant feed for either domestic use or export. ¹¹ A reply approved by MAFF on 6 July stating that:

Since BSE was first identified in this country additional health guarantees have been agreed for exports to a number of Member States. It would not have been appropriate to ban exports of such material as its use continues to be permitted in pig and poultry feed. ¹²

7.14 Mr Lawrence attended the Standing Veterinary Committee in Brussels on 18-19 July. In a minute to Mr Robert Lowson, Head of Animal Health Division at MAFF, he reported that the Commission was expecting the UK to take action to ban the export of MBM containing ruminant material. He pointed out that if the UK did impose a ban on the export of MBM containing ruminant material, the measure would effectively end MBM exports as virtually all rendering plants used ruminant waste. ¹³

7.15 On 21 July Mr Lowson updated the MAFF Minister, Mr John MacGregor, on the developments at the Standing Veterinary Committee including the calls for a ban on export of ruminant MBM from the UK. He said there was a possibility of individual Member States imposing unilateral import bans of ruminant-based MBM, and reported that Germany had already imposed such a ban. He advised that '. . . there is no advantage to us in cutting off all our export opportunities'. ¹⁴

7.16 On 23 July 1989 Mr John Gummer took over from Mr MacGregor as Minister for Agriculture, Fisheries and Food. He received a briefing from Mr Lowson on 25 July which included an update on the issue of export of MBM. Mr Lowson told Mr Gummer:

There has been criticism about the fact we continue to permit the export of meat and bone meal even though it is banned from use in ruminants in this country. However it has been emphasised that importing countries have been made fully aware about BSE and its probable cause and it is, therefore, up to them to decide whether to import and under what conditions.

7.17 He added that 'the material can still be used for feeding to pigs and poultry in this country and exports may be going for the same use'. ¹⁵ Mr Gummer told the Inquiry that he felt an export ban should be opposed and a Community-wide arrangement banning the feeding of ruminant protein to ruminants be sought. ¹⁶

7.18 On 1 August the Netherlands banned the feeding of ruminant protein to ruminants. France banned the feeding of ruminant protein to cattle on 13 August.

7.19 The European Commission proposed a ruminant feed ban in September 1989, ¹⁷ which was supported by the UK, the Netherlands and France but opposed by other Member States. Germany and Denmark felt that they should not have to adopt such measures as they did not have scrapie or BSE. ¹⁸

7.20 As a consequence, UK exports of MBM to EU states continued to be permitted and no ban on the feeding of such material to ruminants was imposed by the EU. However, the introduction of unilateral bans by individual Member States, together with the effect of the raised profile of the issue within the EU, inevitably had a strong influence on UK exports of MBM in 1990. By 1991, exports to the EU had fallen to almost negligible levels. ¹⁹

7.21 In December 1990 MAFF described recent developments in the market for material processed from animal waste as follows:

- there is no market at all for material derived from specified [bovine] offal;

- demand is slack for all animal protein because of caution over the implications of BSE, particularly material derived from fallen animals (following advice from UKASTA that their members should avoid its use);

- the international market for both tallow and meat and bone meal is depressed. ²⁰

7.22 MAFF estimated that since 1988 the price of MBM had fallen from over £200 per tonne to about £120 per tonne of material with no bovine or fallen animal content, and £90 per tonne for material containing no specified offal.

Figure 7.1: UK exports of flours, meats and pellets of meat or meat offal, unfit for human consumption (greaves), 1979-95

Export of MBM to non-EU countries

7.23 As Figure 7.1 above demonstrates, the loss of EU markets for MBM after 1991 was compensated for by increased exports to non-EU countries. The extent to which the UK Government made efforts to ensure that all importing countries were aware of the potential for MBM from the UK to contain the BSE agent, is discussed in vol. 3: The Early Years, 1986-88.