Payment system change
Tönnies short trader on the pig price
Slaughterhouse Tönnies is once again overhauling the payout system. From next Monday, July 10, 0,2% of the pig price will be withheld. This is necessary to be able to continue to use the payment term of a maximum of 5 days.
For more than 10 years, Tönnies has used a maximum payout period of 5 days. This tight deadline is a risk for the slaughterhouse, because it requires pre-financing. That is why Tönnies now demands compensation from its suppliers. Based on the current pig price of Tönnies, €1,81 per kilo in week 27, this means that approximately 54 cents will be withheld from each pig, which is equal to 0,2% per pig.
Adverse measure
In practice, the short payment term is an advantage for pig traders. The margins within the pig trade are already tight and are therefore getting tighter. According to the ISN, the representative of German pig farmers, Tönnies' move is detrimental to pig traders and pig farmers.
The change in the payout system is the second measure in a short time. Mid June announced Tönnies to cut down on bears.
Wouter Job
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