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DERMOT MURNAGHAN: Joining me to take a look at today’s business sections in the Sunday papers is Martin Glenn, he is the Chief Executive of the Igloo Group which owns frozen food manufacturer Bird’s Eye in this country. Very good to see you Martin and thank you very much for helping us along with this task.

MARTIN GLENN: Thank you.

DERMOT MURNAGHAN: Let’s dive straight in and this issue, I’ve been discussing in political terms pastygate and VAT on what kinds of foods, everyone is getting confused at how hot your pasty has to be before you’ve got to pay VAT on it.

MARTIN GLENN: I just love this story and it’s amazing how it’s continued. The budget has been a few weeks gone now and it has continued, it is just a lovely meeting of politics and economics isn’t it? I think the Mail talks about, yes the Mail, that Britain is a laughing stock as we face issues about VAT. Actually I’d rather us be a laughing stock than have a blanket VAT tax on food though and that’s really what the government, all sorts of governments over the years, have been wrestling with so there is VAT in the rest of Europe. In our Portuguese business, a big business for us, they have just hiked VAT up on food to 20% on everything, our peas, our fish products and the lot, so you don’t want that. So what has been happening here is that over the years there have been exceptions made. Initially food was free but not crisps and snacks and soft drinks, then remember it wasn’t so long ago that takeaway restaurants, fish and chips shops effectively had to pay VAT and so the issue is really how does the government try to keep a level playing field as it keeps making these exceptions and it’s difficult.

DERMOT MURNAGHAN: So you feel for them a bit do you? There is an issue here beyond pasties of whether you eat a sandwich in a takeaway, you are asked do you want to eat it inside or do you eat it on the wall outside without paying VAT?

MARTIN GLENN: I do and I think that every issue has been taken on its own merits rather than saying is there a general theme here and I think that’s difficult but where politics collide there is this sense of being out of touch so the fact is that VAT on fish and chips and now VAT on sausage rolls, it is affecting normal people and of course there isn’t, well I say of course but there isn’t VAT on caviar so there is that sense of being slightly out of touch and tin eared but actually we are in a much better place in the UK, there is no VAT on most food that we eat and it would be really unfair if there were.

DERMOT MURNAGHAN: You are talking about the cost of food, well perhaps a bigger driver on the cost of food is what’s happening with the environment, this is the second story you’ve chosen for us, Martin, in the Sunday Times – drought threatens the birds and the bees. Of course it just threatens farmers anyway in terms of being able to grow volumes of stuff on your land but this is another dimension of the drought.

MARTIN GLENN: That’s right, there are lots of dimensions. I think probably the big one fundamentally is still the cost of food and once again it’s tough, it’s tough at the moment we are trying to pay back this national debt, at the same time food inflation has been going up over the last couple of years and regardless of droughts in the UK or not, that’s probably the bigger picture so water is a really political and economic …

DERMOT MURNAGHAN: Tell me how that might affect your company, one thinks Bird’s Eye, you think obviously fish but an awful lot of frozen peas and other vegetables as well.

MARTIN GLENN: Actually on peas, just to put all your viewers at rest, the pea crop is pretty insensitive to this. We grow in north Lincolnshire, East Yorkshire, the soil there, we’ve just drilled it a couple of weeks ago and the soil there is very moist and actually it was pretty similar last year when we had a very good harvest so peas, we don’t irrigate, we don’t need to irrigate. It’s tough for other crops like potatoes and grains and that kind of thing to which we are a little bit less sensitive. The other big issue though, if you see the world of protein just for a second, the cost of beef has rocketed this year, 25% and one of the reasons is that beef is very, very demanding of water and that’s expensive.

DERMOT MURNAGHAN: Tell me about, I mean issues of sustainability and I suppose when we talk about water, I mean into the water with your fish stocks, I believe that we are one of the biggest global consumers of cod in the UK. How do you make sure now that with your enormous buying power that you are buying sustainable fish and indeed educating the public perhaps away from cod being the only option?

MARTIN GLENN: It is a really important point for us because we want to be selling fish forever so we have used sustainability as a very practical issue which is how do you fish from areas which will naturally replenish. A few years ago, it was quite covert really, we switched a lot of our cod in fish fingers to a species of fish called Alaskan Pollock and that is 70% of our range I think is from that species. Consumers ….

DERMOT MURNAGHAN: And that’s plentiful is it?

MARTIN GLENN: Absolutely, it’s abundant, it’s Marine Stewardship Council approved, that’s an independent body that says whether a fishery can sustain, its scientists define how much fish can be taken out, that’s the key thing. So the EC has all that, the scientists say how much should be taken out but then the fishermen all argue. So we don’t buy fish from the EC, but the Alaskan Pollock is very abundant. Since we did that it has allowed some of the cod fisheries in the Baltic to recover so we announced on Friday that all of our cod fish fingers now and actually haddock is independently approved by the Marine Stewardship Council, that’s a big move. So all of our fish fingers in the UK is under independent …

DERMOT MURNAGHAN: But when it comes to that does it cost a bit more and are consumers prepared to pay it? I’m thinking in these straitened times as you mentioned and even when it comes to peas, are people prepared to pay a few pence more?

MARTIN GLENN: Yes, what they are doing, Bird’s Eye is trusted, it’s taste great food obviously but I think increasingly consumers, even in these straitened times, want to know that you’re not plundering the planet or doing bad things so it does cost a bit more, we only ever buy fish that’s got a chain of custody, we don’t buy from wholesalers, we go direct to fisheries but we can charge a bit more for it. Not everybody can afford to pay it but it’s not a huge difference and even peas, we sow the edges of our pea fields with wild flowers and non-pea crops to allow biodiversity just because it’s not that expensive to do, a little bit but that all helps and people expect a brand like Bird’s Eye to be a bit more helpful.

DERMOT MURNAGHAN: Absolutely. And on the corporate front I know you’ve been put up for sale by your ultimate owners. I know you are constrained obviously about what exactly you can say but that’s always seen as a process that might take management’s eye off the ball, it won’t divert you? I don’t suppose you can tell me.

MARTIN GLENN: We’re just driving ahead with all the things that matter. So the consumer doesn’t care who owns us, it really doesn’t matter. I have been in the business since we’ve gone private from Unilever and it has done really well so we are just focused on driving the business forward, the sustainability is a good example of not being defocused.

DERMOT MURNAGHAN: Okay, any interest from management in buying it?

MARTIN GLENN: Well we are shareholders now so that won’t change.

DERMOT MURNAGHAN: Okay, well Mr Clegg thank you very much for taking us through and hearing quite a lot there about Bird’s Eye and its processes. Martin Glenn there, the Chief Executive of Bird’s Eye.