The ongoing “disconnect” between retailer prices and production costs could force the UK to start importing berries at greater volumes, growers have warned.
Retailers are enjoying rising sales of berries, but are failing to pay prices that keep pace with rising production costs, growers have argued.
The issues were highlighted by trade body British Berry Growers, which published the results of its annual autumn survey at a retail meeting this week.
The survey of 50% of BBG’s members revealed large disparities between retail and farmgate prices, in an echo of the issues faced by apple growers.
For strawberries, the cost of production has increased by 18.1p per 400g pack since 2021, according to research by Andersons Midland Farm Business Consulting. Retail shelf prices have risen by 27p per pack over this period – an increase of 14.8%.
However, average grower returns are up by only 2.3% or 3.6p, growers reported.
In raspberries, production costs have risen by 21.2p per 200g, while shelf prices have risen by 19p per pack – but average returns to growers are up just 11.4p per pack. Meanwhile, average returns for blueberries have fallen by 6p per pack, while the cost of production has risen by 23p/200g and shelf prices are up 18p per pack.
Two-thirds of growers in the BBG survey said they had little confidence in the future, and confidence in their retail partners had been dented.
BBG chairman Nick Marston said growers reported that many retailers were only buying on price, which he described a “great pity”.
“It makes little sense that retailers are increasing the price per punnet for consumers but not passing this onto the growers who need it to cover their spiralling costs of production,” he added.
Kantar data shows volume sales of berries have soared 7.7% in the past five months [14 May to 1 October 2023], outpacing growth of just 0.8% across all fruit.
Value sales are also up 11.4% for all berries, while all fruit has grown 7.8% in value.
A strong UK season had driven overall annual growth of 6.3% in berries, said Marston.
The only berry in decline was raspberries, which Marston attributed to disproportionately high labour costs forcing growers to scale back production.
He warned retailers could be forced to import berries at a greater scale “if we don’t see improved returns in the UK” – but would struggle to meet demand.
“There is nowhere else to go to import the volumes of berries that the UK actually consumes,” said Marston which is why investing in the sector is so important.
“If we actually see the UK industry diminish and contract, then the whole category is going to diminish, which will be a huge cost to UK horticulture, a huge cost to UK berry growers in the UK and also a huge cost to you, the retailers”, he added.
The industry body also called for some key government policy changes including an extended seasonal worker visas scheme, continued funding for industry development and R& D, a national planning framework for key infrastructure including winter water storage reservoirs, and a planned export business from the UK production.
“We urge supermarkets to do the right thing by their growers and we urge the government to take urgent steps to address seasonal labour uncertainties, unfair returns and secure long-term growth,” said Marston. ”This is not just about berry growers – the future of UK food security, biodiversity and our nation’s health is at stake.”