France eyeing pork industry consolidation-report

PARIS May 8 (Reuters) - France's FSI strategic investment fund may invest in troubled ham company Madrange as the government seeks ways to restructure a French pork industry reeling from a surge in feed prices, newspaper JDD reported.

Rival ham makers Paul Predault and Jean Caby are already considering separate bids for loss-making Madrange, which has 1,300 staff and is family owned, the JDD said, citing no sources. The Broceliande cooperative is also interested.

The government is looking for "an industrial solution to reinforce the pork industry," which employs 10,000 in France, the JDD quoted a high civil servant as saying.

The newspaper did not say how much the FSI could invest in Madrange, which reportedly needs 30 million to 40 million euros ($42 million to $56 million) to modernize its production plants and IT networks.

Livestock breeders across Europe have faced a steep rise in costs after a rally in grain markets pushed up the price of animal feed, and meat industry players have been unable to pass these higher costs on to supermarket shoppers. [ID:nLDE70N0RE]

The pork industry is also hurt by its dependence on supermarket chains as they sell a large chunk of their production under low-margin supermarket labels as opposed to their own labels, the newspaper said.

Consolidation through mergers would give pork companies a stronger hand in their talks with retailers, the JDD said.

French farmers and food companies agreed this week to apply a volatility benchmark that could trigger a renegotiation of pork, beef and poultry meat prices when they are sharp fluctuations in grain and feed markets. [ID:nLDE74215S]

Agriculture Minister Bruno le Maire had pushed for the accord as part of the government's efforts to help struggling livestock breeders. (Reporting by Marie Maitre; Editing by Hans Peters) ($1=.7158 Euro) (marie.maitre@reuters.com; +33 1 4949 5331; Reuters messaging: marie.maitre.reuters.com@reuters.net))