Focus on Denmark

The future of Danish co-operative slaughterhouses

By Melodie Michel

- Last updated on GMT

The future of Danish co-operative slaughterhouses

Related tags: Slaughterhouse, Pork

What sets the Danish pig industry apart is its co-operative structure, within which abattoirs are entirely owned by farmers. The first co-operative was created in 1887 and, by 1963, there were 77.

That number went down over the years, as less profitable abattoirs were bought out by more successful ones, until there were only two left, Danish Crown and Tican. Currently, almost 90% of pork production is made through these, with Danish Crown taking up 76% of the market, against 10% for Tican.

This system presents a number of advantages, the main one being an integrated production system that rewards farmers financially for the success of their chosen processor. Farmer Ole Skårhøj, a supplier to Tican, says: “Co-operatives are a way to put together professionals who can market pigs at the right price through a streamline to production. We do have competition from the private sector, but they don’t have the same integrated system, so they’re not as close to production.

“Of course, being an owner of the slaughterhouse makes us interested in the abattoir’s business, whereas if we just sold pigs to something that we didn’t own, we wouldn’t care less.”

By improving communication between farmers and processors, the system encourages pan-industry moves ahead of government legislation, as both parties share the same commercial interests. For example in 1993, the Danish pig industry voluntarily implemented a salmonella surveillance programme that was not made mandatory in the EU until 2006.

Danish Pig Research Centre quality assurance manager Trine Vig explains: “They see where the development is going and sense where the consumers would like them to go, and they also know that if they want to stay successful as pig producers in Denmark, they have to be ahead of the legislation and show innovation.”

Danish Agriculture and Food Council director of the UK market John Howard notices a general feeling that it is better for the industry to develop its own control system than wait for it to be imposed by the government.

Tican head of department Henrik Lauritsen agrees, mentioning the various quality initiatives taken by the industry, such as phasing out antibiotic growth promoters on a voluntary basis in 2000, six years before the measure was introduced in the EU. “It’s much easier for us to enforce that on our suppliers, because we are so linked to each other and they can see the benefits from it. They understand that we need to do certain things to be in certain markets, or to sell our meat at the highest price,”​ he says.

However, looking towards the future, co-operatives might need to involve external shareholders in order to continue their expansion and facilitate mergers with international companies. Tican and Danish Crown recently created a provision to allow this, and although they have not yet accepted private investors, it seems like an inevitable next step.

“Tican is still 100% owned by farmers, and one head represents one vote, regardless of the farm’s size, but a provision allows for external investors. Our production grew by four times in the last 15 years and, to keep production up, we need more money that farmers do not have,”​ Lauritsen says.

Related topics: Meat

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