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Mid-size slaughterhouses have to break down giants

The concentration of the slaughterhouse market is the hot topic of the moment, scaring both farmers and small and mid-sized slaughterhouses. Such concentration is dangerous, and could destabilize the supply chain in some regions of Brazil where there is only one dominant slaughterhouse. Concentration is bad, however, for the giants themselves, as a lack of competition leads to inefficiency.

The answer is for small and mid-sized slaughterhouses, in partnership with farmers, to learn how to break down the giants. So says José Vicente Ferraz, technical director at Informa Economics FNP. This means that the small and mid-sized slaughterhouses and farmers should make better use of the market opportunities that are emerging. “They’ll have to look for niche markets, which the large companies cannot serve," says Ferraz.

These niches, which are numerous, arise out of new global consumption habits. Consumers are more demanding, families are smaller, population is aging and demanding healthier products, adds Ferraz. This is where smaller slaughterhouses could operate. In having a less costly corporate structure, they can form partnerships with farmers and serve the new demands. The slaughterhouses and farmers would profit more. "Meat will begin to be less a commodity and more of a brand," says Ferraz. This transformation of the sector is the opportunity that must be grasped by slaughterhouses and farmers, Ferraz says.

Information provided by Folha de S. Paulo

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