Meat business optimistic as sales increase

PARAGON Quality Foods, a Yorkshire meat production business, has announced that its sales are stronger than ever before.

The business reported a 20% increase in turnover from £24.8m last year to £30.3m for the period for the year ended February 28 2013. However, pre-tax profit was down to £98,603 from £111,784.

Earlier this year, the company was the subject of negative press associated with the horse meat scandal. Some of the beefburgers Paragon Quality Foods supplied to a chain of hotels were found to contain horse meat and at the time, the business said it had decided to implement an “industry leading” system of positive release of all its products, to ensure all specifications were met.

Today, the Doncaster firm said the horse meat scandal and bad press has not had any effect on its sales.

Managing director, Metin Pekin, said: “Negative stories have not really had any effect on our sales. This is probably due to the fact that we deal with businesses, which see beyond the headlines, rather than the public.”

Mr Pekin said that now, the firm is at “an excellent point”  as sales are very strong and meat prices have stabilised. Providing this stabilisation remains, he said he believes the company will see normal margins returning for the rest of the year.

Mr Pekin said: “It has been a challenging year for the meat industry. But we have managed to grow our sales as well as our margin. I am pleased to say that sales are stronger than ever before.

“It is clear that the horse meat issue was not with manufacturers like us, it was further down the supply chain, in slaughtering and cutting plants.

“We have obviously improved our system by DNA testing the meat coming to us and we are very optimistic for the future as we are now seeing normal margin returning to the industry.”

Paragon Quality Foods said that extra testing had added to overheads, but this is now passed on to its customers.

It also said that an increase in meat prices affects the business.

Mr Pekin said: “Margins are eroded by the increase in the price of raw meat but previous year’s margins were even worse, due to inflationary pressure of the meat and timing and delay of passing on these increases to customers.

“This is a competitive market and some competitors, due to various reasons, do not want to be the first ones to put prices up – we usually lead the way.”