The UK arm of bacon producer Danish Crown has seen its revenue soar after a shortage of pigs in Europe pushed the price of pork to an all-time high.
The company, whose Denmark-headquartered parent firm is the biggest pork producer in Europe, saw its revenue soar to £610m in the 12 months ended September 30, 2023, up more than £10m from £506m in the year before.
Danish Crown, which owns its entire supply chain from farms to production facilities, said this was due to unprecedentedly high pork prices in Europe, triggered when weak demand in Asia – especially China – led to an oversupply of pigs.
As a result, there was a “dramatic decline” in pig production in Europe, driving huge price rises across the continent.
But despite this surge in revenue, Danish Crown UK’s pre-tax profit dipped, falling to £10.5m over the 12 months from £10.6m in the year before.
A shortage of pigs in Europe has sent the price of pork soaring. Photo: Getty
In a statement published in Companies House, the company said: “European production of pork had to find its balance without significant exports to Asia, especially China, which caused disruption.
“Weak demand in Asian markets led to oversupply in European markets and this, combined with inflation-driven changes in consumer behaviour, sparked a dramatic decline in European pig production.
“The resulting shortages at abattoirs drove a significant increase in pig prices across Europe. As such, revenue of the business increased to £610m for the year.
“Profit before taxation in 2023 decreased to £10.5m as high prices were maintained and global markets began to stabilise.
“Danish Crown UK is in the process of investing more than £100m in a new 30,500 sq.m processing facility, which will use highly automated production equipment and the latest processing technology to slice and pack bacon and gammon produced to UK welfare and food safety standards.
“Trading in the coming year is expected to remain highly competitive across all sectors. Management will continue to focus on business growth and working capital initiatives.”
How is Danish Crown’s parent company doing?
Despite increased investment in its UK facilities, Danish Crown UK’s parent company has been making major cuts elsewhere in Europe.
In April, it announced it would close one of its biggest abattoirs in Ringstead, Denmark, cutting more than 1,200 jobs.
Danish Crown said it was responding to what has been a challenging two years for Danish pig production, with the supply of fewer pigs for slaughter in the country making it difficult to maintain efficiency levels at the group’s Danish abattoirs.
In response, the company is reducing the number of its production sites in Denmark and concentrating the group’s future investments, with the aim of processing its owners’ pigs into products such as bacon and pepperoni rather than primarily being a supplier of raw materials.
This includes investing around £100m in a new bacon factory near Manchester, which the company estimates will be able to produce more than 200 million packets of bacon each year and sustain around 300 jobs.