The Sheep Carcass (Classification and Price Reporting) (Wales) Regulations 2025: integrated impact assessment

The Sheep Carcass (Classification and Price Reporting) (Wales) Regulations 2025

Welsh Government are introducing legislation for Sheep Carcass Classification and Price Reporting in Wales.

Legislation for mandatory carcass classification and price reporting schemes have been in place in the beef and pork sectors for many years as this was mandatory under EU Law, but optional for sheep. The introduction of a mandatory scheme for the sheep sector is intended to bring the sheep sector in line with the beef and pork  sectors. Some individual abattoirs slaughtering sheep have, for a long time, voluntarily adopted a common sheep carcass classification system, and some have additionally voluntarily reported prices to the Agriculture and Horticulture Development Board (AHDB). 

Even so, many abattoirs have set their own standards for trimming and presenting sheep carcasses for classification and weighing. As a result, the operation of different voluntary systems means that carcass weights across the sector lacked consistency. Variations in carcass presentation led to different sizes of otherwise comparable carcasses being weighed, and to non-comparable prices being quoted or recorded. Consequently, sheep farmers often struggled to negotiate appropriate payment for the quality of their carcasses, or to have the necessary details they need to inform their business decisions and increase productivity. 

Due to the cross-border nature of the red meat supply chain, officials have been working with counterparts in UK Department for Environment, Food and Rural Affairs (Defra), Scottish Government and the Northern Irish Department of Agriculture, Environment and Rural Affairs (DAERA) to develop the policy and legislation surrounding sheep carcass classification.

The purpose of our policy is to establish a more transparent and productive sheep market. To achieve a robust system for the classification of sheep carcasses, all methods of classifying carcasses (manual and automated), and to grade carcasses reliably and consistently to a prescribed scale. We aim to set out in legislation a clear scheme for classification of sheep carcasses and how sheep carcass prices set by abattoirs must be reported. 

The legislation will facilitate a weekly publication of reported prices to provide greater market transparency. The classification grades of the sheep carcasses notified to producers can then be used by those producers, alongside pricing information, to target market preferences, improving returns and productivity. 

This will, overall, align the sheep sector with the classification and price reporting already required in the cattle and pig industries.

Implementing advanced classification techniques ensure that the highest quality meat is consistently identified and delivered to consumers. By optimizing feed and resource use, farmers can achieve sustainable production practices that contribute to the overall goal of sustainability in food production.

How have people most likely to be affected by the proposal been involved in developing it?

Welsh Government consulted with industry on introducing legislation in relation to Sheep Carcass Classification and Price Reporting with proposals to align as closely as possible with similar legislation already in place for beef and pigs. This was in response to strong evidence presented by industry in a UK Government Call for Evidence on the remit of the Groceries Code Adjudicator on a need for such legislation. Legislation for Carcass Classification and Price Reporting within the beef and pig sectors was mandatory under EU Law, but optional for sheep. 

The results of that consultation evidenced the desire of the industry to mandate the classification of sheep reporting and enforce the reporting of prices to the producer. Welsh Government agreed to engage further with regards to the information which is reported to producers by both processors and levy bodies and to implement the legislative framework required to underpin mandatory sheep carcass classification in Wales. 

Work on developing the legislation in all four nations was paused initially to concentrate on EU Exit,  the global pandemic and impacts on the supply chain due to the Ukraine war. Officials have continued engaging with stakeholders to ensure the legislation is still required. Stakeholders have responded this continues to be a priority for them. Due to the integrated supply chain, Welsh stakeholders and stakeholders associated with Defra have both noted the importance of aligned timelines in the introduction of the legislation.

In 2024, Welsh Government ran a six week joint targeted consultation with the Department for Environment, Food and Rural Affairs (DEFRA) England on The Sheep Carcass Classification and Price Report legislation proposals.

The consultation was targeted at key stakeholders interested in the production, slaughter, processing and sale of lamb. We asked for views on proposals for a mandatory carcass classification and deadweight price reporting scheme for the sheep sector. We also asked for feedback on the mechanisms for authorising automated grading methods that could be used in Wales and England for the classification of beef and sheep carcasses in abattoirs slaughtering these species. 

During the consultation Welsh Government and DEFRA ran a joint on-line stakeholder meeting to promote the consultation. Welsh Government and DEFRA officials also held a meeting with key stakeholders representing livestock industry bodies and farming unions.

As the consultation was targeted at specific stakeholders, the consultation document and summary of responses were not published on-line. These documents were sent to the stakeholders that took part only and are available to the public on request.

What are the most significant impacts, positive and negative?

The businesses who would benefit from increased efficiency will be sheep farms. The structure of Welsh sheep farms in Wales means that many of these farms are small family enterprises which support rural communities, so this impact is likely to be positive.

The purpose of our policy is to establish transparency and fairness within the supply chain, improve sheep carcass classification and price reporting and create a more productive sheep market, thus benefiting the farming industry.

In light of the impacts identified, how will the proposal: 

• maximise contribution to our well-being objectives and the seven well-being goals,  and/or
• avoid, reduce or mitigate any negative impacts?

The legislation will support the creation of a prosperous, secure, united and connected Wales. The specific goals of the Wellbeing of Future Generations (Wales) Act 2015 which apply include making Wales prosperous – developing a rural economy which generates wealth and provides equal opportunities and a country which is ecologically, economically and socially resilient. 

• a prosperous Wales
• a resilient Wales

To this end, the policy aligns with the objectives of the Well-being of Future Generations (Wales) Act 2015, which underscores the significance of sustainable development. The legislation aims to create a thriving agricultural sector by enhancing the transparency and fairness of the supply chain, optimising sheep carcass classification, and improving price reporting mechanisms. This, in turn, fosters a more productive and equitable sheep market, ultimately benefitting the entire farming industry.

How will the impact of the proposal be monitored and evaluated as it progresses and when it concludes? 

A Service Level Agreement (SLA) is in place between Welsh Government, DEFRA and RPA to outline the requirements, roles and responsibilities of all Meat Technical Scheme (MTS) inspections in Wales and England. Inspections will be carried out  by the Rural Payments Agency (RPA) at appropriate intervals as part of the wider Meat Technical Scheme (MTS) which is already undertaken by them in Wales.

Sheep carcase classification baseline data will be collected and collated weekly from abattoirs required to price report data to AHDB within the requirements of the regulations.

This information will provide an indication of whether, and to what extent, the scheme has met its objective of enhancing the information available to producers and the wider industry.

Compliance monitoring will be undertaken by the RPA and industry feedback will be aligned with those of the beef and pork legislation via MTS stakeholder meetings.