The pigmeat market has become increasingly global in the past decade and the CAP (Common Agricultural Policy) Mid term review, GATT (General Agreement on Tariffs and Trade) and WTO (World Trade Organisation) negotiations will all drive a continuation in this trend. This period has also witnessed an end of the traditional domestic pig cycle, in which UK supply and demand impact directly on price, together with a decline in the domestic herd of 37% since a peak in 1997 of 789,000 sows. The industry and our retail and food service customers are now acutely aware of EU:UK price differentials, exchange rate fluctuations and the ability to switch supply routes. One of the UK industry's key areas of differentiation is animal welfare, and this is gradually being eroded by the introduction of EU legislation – The Netherlands have introduced similar legislation to the UK which comes into effect in 2008. It is for these reasons that it is imperative for the UK industry to re-establish its competitiveness in terms of outright cost of production. It is only by closing this gap that we can secure long term stability and growth. But to achieve this we need to quantify where we are at present in relation to our competitors, and where the opportunities exist to close the gap.