Buying Groups: Biting The Hands That Feed?

The supply of game feed could be facing increasing pressure with a rise in the incidence of buying groups in the British market. Fears are that if the buying group model is rolled out throughout the UK to make a single, nationwide buying group then it will put smaller mills under massive pressure, reducing healthy competition in the market and jeopardising the equilibrium of the supply chain.

Buying groups are common throughout agriculture – for example, Southern Farmers Ltd is a buying group in the South with over 900 members. It acts as a non-profit making organisation, the sole purpose of which is to act as a buying agent for its members, who also own the company and benefit from the preferred terms with group suppliers. The benefits of belonging are bringing the buying power of many smaller farms into one large unit acting in concert – and now game feed buyers are doing the same.

Brian Mitchell, a vice chairman of the National Gamekeepers’ Organisation (NGO) has promoted the concept of buying groups since successfully founding the Exmoor Game Feed Buying Group three years ago. Its initial membership of eight shoots rose to 13 by year two and looks set to continue to rise. Criteria for membership revolve around tonnage; location; and credit-rating, with commitment and prompt payment being vital. High-bird, big bag shoots acting as a consortium and putting feed supply out to competitive tender has provided distinct advantages to the members, says Mr Mitchell.

“I got the group together originally and asked dairy-feed buying specialist Chris Laycock to help. He became the main organiser and later received £4 per tonne commission. His brief is to organise the group’s activities and he got a specialist nutritionist involved. Seven mills were shortlisted, asked to quote for the order and provide a detailed content-list of the product. After consultation with our nutritionist the tenders were shortlisted to three. The remaining three mills’ product-content and tender price were discussed at length but the actual mill names were not revealed. The winning tender in the first year was ABM Sportsmans Feeds, and last year, they won the tender again. Sportsmans proved efficient and keen to look after our group; their back-up service was great.”

“This February, our Exmoor group will meet again to look at sending out tender invitations – this will be even more important this year, as breeder pellets are up £80 per tonne; crumbs and rearer pellets will see a price rise of at least £90 per tonne, plus this year, we’ll seek veterinary advice as additional back-up when looking at tender content.”

Mr Mitchell’s success with the Exmoor Group has led to a similar consortium being set up in Wiltshire to buy gamefeed, and other shooting-intensive areas are now looking at the cost-savings collaboration can provide. The members are buying poults rather than rearing – so it makes it easier to consolidate their orders to a specific pellet, as opposed to intensive rearers, who need different grades of rearing ration at different stages.

Although Mr Mitchell was at pains to point out to Modern Gamekeeping that his vice chairmanship of the NGO in no way can be construed as NGO support for buying groups and indeed stressed how important it is for BASC, the NGO and the GFA to remain impartial, sources reveal that the schemes are not without concern. Some in the rank and file Gamekeeping community worry about the potential for such schemes to be damaging to the industry if not carefully considered.

It is understood that using such a consortium’s power to get the best prices for shot game by collaborating to export it is also under consideration – a move which if implemented could potentially hamper the development of domestic market game sales. In addition, other Exmoor gamekeepers have reacted angrily to Mr Mitchell’s direct approach to shoot owners, which they say has taken away control over where each sources his feed and has ruined the relationship between gamekeeper and local feed supplier – considered an essential part of the keeper’s role by many. But the real fears are that the ambitions for the buying group could be unbridled – creating a feed-buying monopoly.

A headkeeper on a major estate in the North-East said: “A buying monopoly would only cater for the cash-rich big shoots. The direct knock-on effect could be the closure of smaller mills which would spell disaster for many shoots who could not sign up to the monopoly. Feed could then become increasingly expensive for more isolated shoots due to travel distances and increased haulage costs.”

“This monopoly buying group idea is not liked by the majority of shoots. A serious worry would be reliability. Would a big firm really be prepared to send half a tonne of feed at a moment’s notice to a desperate keeper during rearing time?”

Mr Mitchell has been challenged by gamekeepers anxious about his ambitions for the buying group, with concerns about how his position as NGO Vice Chairman risks becoming entangled with the perception of how the buying group does business. Though it is clear that Mr Mitchell has stood to gain nothing other than saving his shoot and others’ money, his name is inextricably linked to the NGO and runs the risk of being misconstrued as tacit NGO support for the buying group model. It is understood that the NGO has been keen to distance itself from any association with such a scheme.

A leading feed-industry expert said that it would be improbable for any sort of nationwide buying group to work, and the estimated 5,000 tonnes of feed required by GESA members would eliminate many of the feed manufacturers. He added that the buying group had created “something of a rumble” within the industry but added that the sort of tonnage involved meant that smaller suppliers would find it hard to make it work.

“Buying groups are problematic in other ways, too,” added the industry insider. “Often driven by the boss, if a shoot goes badly they’ll still turn to the gamekeeper and want to know what went wrong – who will find it very difficult to say: ‘It’s your fault, you bought the food.’

“Moreover, although the feed can be cheaper on paper, it can end up costing more: a former agent for the agricultural industry related the story of a seven-man strong group of farmers. Their buying group saved around £30/tonne of feed – but, knowing it was cheaper, they ended up using more anyway. Biggest among the potential problems for buying groups, however, is the fact that all members of the group are responsible for each other’s debt. The larger the group, the bigger this issue would be, making a nation-wide buying group a potential minefield of financial issues.”

Another industry expert also urged caution over buying groups. “They’re a fairly new concept in our industry. Yes, they happen, but unless the people involved really know what they’re about, they should steer clear – and disparate interests within the group can also be an issue. The way they’re managed, and the people involved can either make them work or fail – there are many different elements to go wrong. But your take on buying groups depends where you sit in the industry – and whether they’re a benefit or a curse, it looks like they’re here to stay.” ν

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