Polish meat meat market faces up to consolidation
safety regulations, it seems that major consolidation by western
giants looks likelier as domestic players' budgets struggle to keep
pace with big budgets.
A report in the Polish Bulletin, this week confirmed that American meat company Smithfield Foods, owner of Animex, has just purchased a 15 per cent stake in Spanish-owned Campofiro's meat processing plant in Morliny.
US-based Smithfield Foods is currently the biggest meat processor in the world and is by far the biggest player in the huge domestic market. Its financial clout means that forking out $87.8 million for the shares in the concern is relatively minuscule compared to its overall budget. On the other hand few, if any Poland-based meat processors have these sort of funds at hand.
"The transaction creates the ground for strategic co-operation between the two firms, and allows us to take advantage of synergys between our plants in Poland and France," said Smithfield's president Joseph W. Luter.
Industry experts believe that the move by Smithfield will be the first in a series of such transaction which will push the market into a more consolidated state, increasing the modernisation and efficiency of the sector.
However, for leading domestic players such as Sokolow, it will only serve to make competition more intense, particularly in the light that such players cannot compete in terms of budgetary expenditure for further purchases.
Current figures indicate that the sector is still undergoing an immense struggle to comply with EU accession regulations. Only last month official figures indicated that 127 meat processors had managed to comply with the regulations, which left 1,513 plants still struggling to comply. Industry experts believe that the threat of meat plant closures could lead to thousands of job cuts.
