When the Cutlet Emperor asks for help…

Sometimes a news item lingers a bit longer, and we try to place it in the context of the time. One such message was the appeal by Clemens Tönnies (photo) to the German government. An apparently normal call in times of crisis, but behind it reveals a lot about the stoic big business and the state of the pig sector. What does it tell us when the cutlet emperor, the billionaire and the flagship of the free-market economy in the pig supply chain, asks the government for help?

The German pork chain is suffering from a 'perfect storm'. Supply and demand are in imbalance. Although Tönnies' cry for help refers to several incidental factors (which certainly have an impact), he fails to mention perhaps the most essential and structural one: the changing consumption pattern in Germany. Germans now eat 18% less pork than in 2010, according to figures from the German Ministry of Agriculture.

At the same time, environmental and animal welfare requirements for companies are being stepped up. Large supermarket chains have also indicated that they will demand even more in the field of animal welfare in addition to regulations, following the changing consumer. The impact on companies in the chain is huge.

Animal numbers are declining
German slaughterhouses now process 10% to 20% fewer animals than a few years ago. Despite the lower supply, the sector is confronted with historically low prices. This can only mean one thing in the short term: the numbers are going back even further. And therein lies the crux for Tönnies. The slaughter hooks are never filled as before.

In recent decades, however, a fortune has been earned that has been reinvested all over the world. It earns the cousins ​​Clemens and Robert Tönnies a listing in the list of business magazine Forbes, with the 2.000 richest people on earth. Together, the gentlemen have assets of €3,3 billion. A stark contrast to many family businesses in pig farming.

Keizer willingly allows himself to be photographed
Precisely the man who profited pre-eminently from free-market thinking is now asking the government for help. The emperor willingly allows himself to be photographed in overalls, brotherly with a pig farmer. In addition, an urgent text message: help the sector, it can't go on like this. Apparently a sympathetic question, but isn't self-interest dominating here?

It is a typical phenomenon in recent years. Companies (and their shareholders) that make a fortune in glory years, praise the free market, ask the taxpayer for help in bad times. Suddenly the hand of the government is appreciated. Riots around, for example, Booking.com and AirFranceKLM have already exposed this problem.

Collecting shards
Now we see the same thing happening in our pig sector. Something that does not fit with the mentality of many entrepreneurs in this industry. Many farms, but also companies further down the chain, are run by families with a long-term vision, who so often picked up the pieces themselves in bad times and put their shoulders to the wheel with family members.

Moreover, countless parties have already taken up the challenge themselves and are responding enthusiastically to the changing market. A new generation of entrepreneurs is creating demand-driven concepts in which animals, entrepreneurs, employees and consumer wishes in our own environment are central. A course that will eventually lead to greater social appreciation.

Shift to new revenue models
The man who for years benefited disproportionately from a system that was based on production, efficiency and export - while paying little attention to other stakeholders - has not stuck his neck out. His appeal is therefore the signal that outdated business models are subject to severe erosion. It is therefore certainly not fair to the new generation of entrepreneurs to respond to the request for help.

When the cutlet emperor asks for help… it is clear that something is structurally wrong, and that change is required. The sector is on the eve of a faster shift to new revenue models, in which hopefully everyone will get their fair share of the pie.

Steve Wissink

Stef Wissink is a pig farmer in Twente and editor at Boerenbusiness.

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