“Our plan is to focus on production in the Benelux countries,” Vion CEO Ronald Lotgerink said a few days ago, explaining the Dutch company’s plan to largely withdraw from Germany. This decision is surprising because of the way the company is organized. Vion has 16 production facilities in Germany, when in the Netherlands there are only half. According to the newspaper Handelsblatt, an industry insider describes Vion’s exit from Germany as a “forced sale”. And the numbers seem to back it up. In the financial year 2022, the group’s losses had increased from 29 million euros to 108 million euros.

Founded 90 years ago as a meat processing plant, Vion is today one of the largest meat companies in the world. The company, which has repeatedly hit the headlines with accusations ranging from poor hygiene to animal cruelty, is Germany’s third-largest slaughterhouse. Only Westfleisch and – by a large margin – the Tönnies group surpass it in the top market positions.

Meat but without… meat

But not only the Vion group, but the entire industry is suffering from shrinking sales. One reason for this is the eating behavior of Germans, simply because they eat less meat. This observation has also been made by the German Nutrition Society (DGE), which appears as an independent advisory body for nutritional science. DGE nutritionist Zilke Restmaier told Deutsche Welle: “The long-term downward trend in meat consumption in Germany continues. According to preliminary data from the Federal Information Center for Agriculture (BZL), per capita meat consumption will decrease in 2023 by 430 grams to 51.6 kg”. The Federal Office of Agriculture and Food (BLE) records the same trend. “The calculated volume of consumption has been slightly decreasing for several years. One of the reasons for this is probably the change in the way of eating,” he observes.

This can also be seen in the percentage of meat substitutes in the German diet. Vegetarians and vegans obviously don’t want to do without meat – it just shouldn’t be meat they’re going to eat. Whether it’s vegetable “meatballs”, tofu “sausage”, or seitan “roast duck”, the demand for meat substitutes is constantly increasing, according to the Federal Statistical Office (Destatis). As it reports, in 2023 companies in Germany produced 16.6% more meat substitute products than the previous year, with production more than doubling in a five-year comparison to 2019″. Susanne Abe from the Federal Office for Agriculture and Food interprets this with changing attitudes towards ecological aspects. “Generally increased awareness of the effects of high meat consumption on our health, the climate and the environment is also likely to play a role.”

Reorganizations elsewhere

But it is not only the new consumption habits in Germany that are leaving their mark on the market. Developments in other parts of the world are also felt in the accounts of butchers. For example with the import bans imposed by some Asian countries due to African swine fever, a viral disease affecting domestic pigs. Many parts of the animal that are difficult to sell in Europe were delivered there, such as pig ears, which are considered a delicacy in China. International trade disputes also play a role. A few days ago the Chinese Ministry of Commerce in Beijing announced that it will also examine pork imported from EU countries as part of anti-dumping investigations. Market watchers saw it as a reaction to the EU’s threat of punitive tariffs on Chinese electric cars.

In addition, there are always new regulations and requirements affecting the slaughter industry. And not only from the EU, but also from Berlin for the German market. Agriculture and Food Minister Cem Ezdemir has repeatedly stated that he wants to change livestock farming in general. His goal? “Fewer animals should be raised, but at the same time they should have more space and be able to live in a way more appropriate for their species.”

However, less livestock in this country also means fewer jobs for local slaughterhouses. Current Destatis figures on meat production in Germany show that the minister is on the right track, as he believes. In 2023, 4% less meat was produced again compared to the previous year, a decrease of around 280,000 tonnes to 6.8 million tonnes. In 2016, this number was 8.25 million tons. German butchers fear that other countries with less stringent regulations than Germany, such as Spain or Poland, could enter the German market as suppliers and displace German companies even more.

Competition from the grassroots

According to Handelsblatt, some industry experts predict that the German slaughterhouse market will be shaken even more. Another competitor, the Danish butcher Danish Crown, could also leave Germany in the near future. So far, the Danes have refused: “The competition would like this, but we are staying in Germany,” said a company representative. In 2023, however, Danish Crown had significantly reduced its slaughter volume by around a third. “This was announced,” Danish Crown explained. The reason is that already last year fewer and fewer animals were slaughtered in Germany. The big company from the neighboring country of the North seems to be reorienting. It unveiled a new strategy six months ago and is currently looking for a successor to its current chief executive. Thus, the industry remains mobile. Vion has also acknowledged this: “The process of stabilizing the industry in Germany is not yet complete.”