Mobile abattoirs - viability and sustainability: report

Executive Summary

This report describes the findings of a study carried out to determine whether or not mobile slaughter units (MSUs) would be viable in Scotland, by providing detailed research of all aspects of what would be required, including the impact mobile abattoirs would have on the viability of existing processing facilities and supply chains.

With the closure of abattoir facilities in rural areas in Scotland many animals are now having to travel further to be slaughtered and returned for processing in local businesses (butchers) than before.

The main objectives for this research were to:

• Review business models in other countries where mobile abattoirs exist to understand how they operate, how they are financed, when and why they were established, their processing capacity, regulatory environment in which they operate and impact they have on other existing abattoirs and supply chains in these countries.
• Investigate cases where mobile abattoirs have ceased operation (such as the case of the UK in the 90s) and the reasons for this.
• Establish whether or not mobile abattoirs would be viable in Scotland by determining exactly what would be required from a regulatory point of view to operate such an enterprise (i.e. Food Standards Scotland requirements, water supply, waste removal etc.).
• Assess various operation models of mobile abattoirs to determine what would be required to make them a viable and sustainable operation (operational costs, number of animals slaughtered, facilities and skills requirements) in Scotland.
• Assess what impact mobile abattoirs could have on the viability of existing processing facilities and supply chains.
• Engage with key stakeholders to establish their views regarding the implementation of mobile abattoirs in Scotland.
• Consider changes that might help improve the viability of existing small abattoirs in Scotland.

Findings and Conclusions

A number of operational models were identified for detailed assessment, following the review of international case studies and stakeholder engagement responses. The models considered included:

• An MSU travelling to individual farm sites.
• A “hub/ docking” approach, where local farmers would transport animals a short distance to be slaughtered. Potential sites included farms, marts, animal processors, etc.

The review identified that the most practical and preferred solution was the docking station approach and a cost benefit analysis (CBA) was then undertaken based on MSUs using a docking station approach, which could for example, involve a unit driving to the following types of location, which already have much of the required infrastructure in place (lairage, drainage, power, water): an auction mart; an industrial unit; and/or a farm.

The docking station approach modelled in this report has been discussed with a number of key stakeholders, including butchers, smallholders, crofter, farmers, auction marts, waste collectors, abattoirs, MSU designers, MSU operators and the regulators (FSS, APHA, and SEPA). Stakeholder engagement has identified significant interest and demand for an MSU service. However, this should also be interpreted as support for a local abattoir service, regardless of whether it is mobile or fixed. This support has been expressed by crofters, smallholders and farmers. More than 600 individuals responded to an online survey advertised in a number of relevant journals, with more than 90% of respondents indicating that they would support and use an MSU service. The principle reasons given were related to animal welfare (reducing the haulage distances) and the desire to create more local meat sales businesses/ opportunities.

Members of Scottish Craft Butchers also completed an online survey, with a significant majority expressing their support for MSUs. For a future service the interest and participating of butchering businesses will be instrumental to its future success.

The existing abattoir sector has expressed different views on MSUs, depending on whether these are located in the islands or on the mainland. Two island abattoirs indicated that they were concerned that support for MSUs could result in the diversion of public funding that otherwise could be channelled to their businesses. The mainland abattoirs indicated that MSUs were seen very much as a niche development/opportunity and were not considered to be a threat to their businesses.

A review of international case studies identified MSUs operating for a significant time in Norway and Sweden, however, these have stopped trading (in 2019 for the Swedish MSU) due to what has been described as financial difficulties. The context for each of these MSU services was different, with the Norwegian MSU not able to slaughter for a sufficient number of days per annum and targeting mainly sheep. The Swedish MSU also processed sheep, along with cattle (very few pigs) and never operated at a profit - its operational model may have contributed to this by targeting individual farms. The Managing Director commented that a docking station approach, with scheduled days for slaughtering at known locations would have greatly assisted the Swedish MSU in terms of how effectively it was operated.

A variety of funding and financing methods have been used internationally, with the majority of MSUs reviewed using private funding. The Canadian MSU operating in Yukon was state-funded.

The cost for authorising and maintaining a service, in terms of compliance costs associated with approving an MSU, waste management and veterinary and meat hygiene inspections has been shown to be a very small part of the overall costs of any future MSU. The most significant costs are those for staffing, waste disposal, maintenance (of the capital equipment) and debt financing.

The operational models considered in the cost benefit analysis require docking station locations to form part of a future MSU service, with auction/livestock marts, farms, and industrial units potentially viable places, with chill units installed for hanging carcases. The operating models considered for a future MSU service included these as stand-alone businesses providing butchers, meat processors and farmers with carcases (e.g. sides, quarters).

In terms of the types of MSUs that would be required a number of options were considered and a cost was used that allows the kill, evisceration, cutting (quarters and side) with limited, temporary chill facilities in the trailers themselves. This requires waste to be left at the docking station locations, in secure containers, with collection by a registered carrier then taking place without undue delay (likely to be in line with fallen stock timelines). The capital cost associated with this model is between £800K and £900K.

The CBA outputs indicated that there were two operational models and scenarios where payback could be achieved without grant funding, in a time period of 11 to 15 years. These models involve generating premium prices from the sale of meat and offal sales, based on demand from a local provenance and animal welfare perspective (reduced haulage distance). If grant funding at a level of 40% of the capex is considered the payback period is significantly reduced, to 7 and 9 years. However, these scenarios still need significant amounts of private investment.