German Meat Producer Tönnies Sees Sales Drop Due To COVID Impact
German meat producer Tönnies has reported full-year sales of €7.05 billon for its 2020 financial year, a 3% drop compared to the previous year, largely due to COVID-related effects.
The company said that its performance was affected by a four-week shutdown at its Rheda production plant, as well as a 'significantly lower' pig price, on average 9.3% lower than in 2019.
Overall, after a strong first half, the second half of the year was weaker, the group said in a statement, with 28 of its 29 production sites worldwide having a 'decent year'.
“The coronavirus year 2020 was the biggest challenge in the history of our company and its employees," commented Clemens Tönnies, managing partner.
"Whereas at the onset of the pandemic in the first half of the year we were asked by the politicians to produce more and fill the supermarket shelves for the lockdown, the four-week plant shutdown [...] negatively affected the Rheda balance sheet.”
On pig prices, which varied at between €2.02 and €1.19 per kilogram last year, the company has called for 'stable and adequate prices' for agricultural producers in the long term.
“If we want to maintain agricultural production in Germany in the future, we need the acceptance of society at large," commented Wilhelm Jaeger, head of Tönnies' agriculture division. "That’s why we are committed to the goals of Agriculture Minister Julia Klöckner’s Borchert Commission.”
The Borchert Commission has been established to improve animal welfare in the farming supply chain, and well as ensure a fair price paid to farmers that meet certain ethical criteria.
Internationally, Tönnies has made several hundred million euros worth of investment in its Great Britain, Denmark, France, Spain and Poland operations, it said.
It sees the UK as a 'growth market' for the business, while production plants in Denmark, France and Poland 'are also developing very positively'.
In addition, the business is also developing its vegetarian and vegan meat substitute businesses, represented by the brands es schmeckt, Vevia and Gutfried veggie.
“We don’t see the production of vegetarian and vegan foods as competition for our meat products, but as a market segment in its own right and as an excellent addition to our already very broad product portfolio,” said Maximilian Tönnies, part of the next generation of the Tönnies family to take part in the running of the business.
Last month, Tönnies was forced to deny rumours that the family-owned business was potentially up for sale.
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.