Mobile abattoirs - viability and sustainability: report

11.0 Conclusions

Stakeholder engagement has identified significant interest and demand for an MSU service. However, this should also be interpreted as 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.

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 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 how effectively it was operated.

In terms of funding the MSUs, the Swedish business was financed through bank loans, and with significant levels of funding by individual investors. The Norwegian MSU was financed by a group of private shareholders. The Australian MSU considered only started operating in the summer of 2019 and therefore more time is needed to understand how well this works. It is understood (though not confirmed) that this was funded from individual investors and also used crowdfunding approaches. The Canadian model investigated is 100% funded by the state government, to provide a service which assists in promoting and developing rural and remote business growth in the area (Yukon).

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 operation. 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 would require docking station locations to form part of a future MSU service, with auction/livestock marts, farms, and industrial units potentially viable places. Livestock marts present a particularly interesting opportunity in this respect, and one of those contacted, in Orkney, expressed its interest in being a location. Butchers in Orkney, although expressing their satisfaction with their current abattoir service in the mainland would be interested in using an MSU service. 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. 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 circa £838K.

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
15 years or less. 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.