the multiple problems that put the supply at risk

On a simple level, the story of continued salad shortages in UK supermarkets is easy to tell: unseasonable weather in southern Spain and Morocco has affected the harvest, leading to a lack of imports of the main supplying countries.

But underneath are a plethora of problems that go well beyond the trays where tomatoes, cucumbers and peppers are typically placed, and are problems that could lead to more supply chain problems down the road.

Among those issues are Brexit; major UK supermarkets looking to compete with German discounters, leading to price pressure on farmers; skyrocketing energy prices discourage growers from heating greenhouses during the winter, and the government fails to step in to address labor shortages or provide energy subsidies.

The British Retail Consortium (BRC), which represents the country’s grocery stores, sticks to the narrative that the weather in Spain and Morocco is causing a short-term problem.

Andrew Opie, its director of food and sustainability, says: “Difficult weather conditions in southern Europe and northern Africa have disrupted the harvest of some fruits and vegetables, including tomatoes and peppers. While the disruption is expected to last a few weeks, supermarkets are adept at managing supply chain issues and are working with farmers to ensure customers can access a wide range of fresh produce.”

Supply Chain Resiliency

The UK government is also largely taking the line that this is something of a problem that can be easily remedied.

In a statement, Minister for Food and Agriculture Mark Spencer said: “Buyers should know that our food supply chain is extremely resilient, as we saw during Covid-19, with our retailers and farmers working hard day in and day out. to keep the nation fed.”

However, suggesting an acceptance of the existence of broader problems, Spencer spoke to supermarket bosses and, according to a government statement, “asked them to take another look at how they work with our farmers and how they buy fruits and vegetables so they can continue to build our preparedness for these unexpected incidents.”

Meanwhile, food industry experts, while accepting the immediate problem of adverse weather conditions on farm sites, believe there are structural issues that need to be resolved.

Multiple issues behind UK salad shortage

Tim Lang, emeritus professor of food policy at the City, University of London and author of the book feeding britain, says: “It is very dangerous to say that it is only about the weather. Was the weather responsible for the shortage of eggs and turkeys? It is only superficially accurate to say that it is about the weather.

“We are dealing with multiple issues here. The snow in Spain and Morocco will vanish and another one [problem] will come.”

Industry analyst Clive Black, director and head of research at Shore Capital, acknowledges that weather conditions in southern Europe and northern Africa are the immediate cause of the problem, but not the only one.

“The key factor behind where we are today is the weather. If we had had normal conditions in the north of Morocco and the south of Spain, we would not lack product. We have to be honest about that. First of all, it is a supply shortage,” he says.

“The more pertinent question is why the UK has a shortage of produce compared to mainland Europe. Supermarkets are well stocked there.

“It all comes down to basic economics. The UK is not very attractive right now for suppliers of salads and vegetables from all over Europe.”

Henry Dimbleby, the founder of food chain Leon and author of the UK’s National Food Strategy 2021 report, reacted to the latest UK food shortage, in which some supermarket groups rationed purchases of cucumbers, lettuce, peppers and tomatoes from consumers, blaming what he sees as the UK’s “weird supermarket culture”, which sees suppliers wrestle with rising costs while locked into fixed-price contracts

writing on The Guardian newspaper, Dimbleby called it a “market failure” and said: “I don’t know of any other system where supermarkets have these fixed-price contracts with suppliers.”

a new strategy

Like Dimbleby, the National Farmers Union (NFU) also believes that there are structural problems that need to be resolved.

Following the salad shortage in the UK, the NFU has launched a strategy aimed at boosting horticulture.

“If you have government backing, this could be the solution to minimize future supply chain disruptions,” he says.

The NFU’s suggestions include sustainable energy supplies, access to skilled labor, investment in productivity and “equity” in the supply chain.

NFU President Minette Batters said: “The consequences of undervaluing growers can be seen on supermarket shelves right now. The shelves are empty. This is a reality that we have been warning the government about for many months. Without urgent action, there are real risks that empty shelves will become more common as UK horticultural businesses struggle with unprecedented inflationary pressures, especially on energy and labor costs.

He added: “To meet this ambition, the government must deliver on the levers for growth in the sector that it highlighted in its Food Strategy last summer.”

speaking to just foodMartin Emmett, chairman of the NFU’s horticulture and potatoes board, says: “This [shortage] was by no means an exception. We can assume that this is a fact that is going to happen and we cannot put all our eggs in one basket.

“The current situation has highlighted something we predicted, so we hope the government will listen.

“What we need to do is look at the supply chain narrative to build more resilience and spread risk.

“After the report by Dimbleby Defra [the Department for Environment, Food & Rural Affairs] He said he was working on a growth strategy for horticulture, but we haven’t seen evidence of significant progress.”

import dependency

According to figures quoted by the NFU, 50% of vegetables and 15% of fruit in the UK are produced domestically.

When it comes to salads, British broadcaster the BBC He cites statistics showing that of all the tomatoes consumed in the UK (around 500,000 tonnes a year), UK growers produce one fifth. More than a third of the tomatoes consumed in the UK now come from Morocco.

In the winter, any shortfalls can usually be made up with indoor-grown tomatoes, but there has been a shortage of seasonal farm workers, partly as a result of post-Brexit rules and foreign workers returning home during the pandemic. Meanwhile, high energy costs have discouraged UK growers from heating greenhouses.

Lee Stiles, secretary of the Lea Valley Growers Association (LVGA), which represents members in an area near London that has been dubbed the UK’s ‘cucumber capital’, says: “The costs of growing produce over the winter have increased by 100% due to increased energy costs.

“And we only get workers for six months under the [post-Brexit] Temporary worker regime and then they cannot return for 12 months, so they have to be staggered and we are constantly training people, which brings additional costs.

“We are at a huge disadvantage compared to European growers with their freedom of movement.”

united thought

These are problems for which the government can be criticized, believes Emmett at the NFU.

“It’s about the need for more united thinking and more commitment,” he says.

“Why did he do it? [the Government] not include horticulture of protected crops in your high energy relief scheme?

“It is also an issue like planning. Seasonal workers need accommodation and we shouldn’t have to fight to get permission to build tall greenhouses.

“We need more effective national and interdepartmental guidelines so as not to get confused with such basic problems.”

crisis intervention

Prof. Lang goes further and speaks of “shocking incompetence” on the part of the Government.

He says: “There is a blindness from British politicians to food resilience. The reflex is ‘leave it to Tesco et al’.

“Dimbleby’s food strategy report was swept away. It is crisis intervention after crisis intervention, but there has been very little crisis intervention on the cost of food.”

Professor Lang is among those who believe that the price consumers are willing to pay for food in the UK and the intense competition between supermarkets has produced a downward spiral, resulting in low value contracts for providers.

“Optimists say so [the shortage] it was just a hiccup and we can fix it. The realists say that there are structural problems, including the power of the supermarkets, ”he says.

“In continental Europe, consumers are willing to pay more for food and less for housing. We are a housing bubble economy.

“These things will keep showing up.”

Black at Shore Capital agrees. “European supermarkets will pay a higher price [to suppliers] and, like it or not, consumers there also pay a higher price.

“British [consumers] don’t spend enough on food. If you want to keep supply and you want things to be sustainable, you have to start paying for that.”

need for discussion

Black is just as critical of the UK government’s response to structural and systemic problems in the food industry as Lang.

“It is not due to Brexit but due to incompetence. Defra is worse than neutral, ”he says.

“I don’t blame Defra for the cold weather in Spain and Morocco, but the debate is much more about structure and strategy. And that conversation doesn’t exist.”

supermarket contracts

Stiles at LGVA sees the problem of low-value contracts as crucial to the UK’s salad shortage.

“It all comes down to the price British supermarkets are willing to pay for British salad in the winter,” he says.

“For the past few years, they haven’t offered enough, so growers have left their greenhouses empty.

“They depended on Spain and Morocco, but there they grow under plastic and it has snowed, so the crop is not growing at the usual rate.

“Also, if you have a truckload of tomatoes from Spain or Morocco, are you going to take it somewhere in Europe or are you going to spend more days getting it to the UK with additional paperwork?

“And European supermarkets pay more. A cucumber is £0.75 (US$0.89) in the UK and £1.50 in Europe, so we’re pretty far apart.”

Stiles sees the solution as simple. “UK supermarkets could be more flexible on prices, while the government could change its policy on access to labor and could offer [energy] subsidies for producers”, he says.

Shore Capital’s Black agrees. “The government needs to treat food security as something of strategic importance. We need to nurture our agri-food supply chain and agricultural technology,” he says.

It also suggests that there should be discussions about what providers are paid.

“There has to be discussion. Does below cost exist in the UK and is it good for the supply chain? And that belongs to the German discount stores,” she says.

“German discounters are a key factor why there are no salads in the UK at the moment.”

Source link

James D. Brown
James D. Brown
Articles: 8406