Britain’s berries are feeling the pinch as supermarkets fail to meet growers’ inflationary costs of production, while bad weather and a turbulent labour market continue to affect output and pile on more cost strains.
That’s according to the sector’s trade body British Berry Growers, which has this week launched a scathing attack on supermarkets. The association says Kantar data shows supermarkets have increased the average price of berries by 11% for consumers in the 2022 British season from May to September. However, BBG members say the in-store price rises on their strawberries didn’t make it back to them in 2022.
“If we don’t address this disconnect, British berry growers will start to reduce the numbers of berries they grow or go out of the industry completely, as they are unable to make a profit,” said Nick Marston, chairman of BBG.
This strain is not isolated to berry producers, however, but is indicative of wider issues facing the entirety of the UK’s fresh produce supply chain. And it’s going to get worse.
British apple growers secured a minor rise
Growers take on the most risk in the current supply system: they make contracts with retailers ahead of season performance, when crop performance or potential input costs are unknown. Compounded by an increase in freak weather events, rising input costs and other factors, it is expected profits will further wilt if improvements aren’t made soon.
In April, The Grocer found that British apple growers struggling with soaring energy and labour costs had secured cost price increases of less than 1% in the past year, despite shelf-edge prices rising by as much as 46%. Meanwhile, cucumber growers reported anecdotal increases of between 5% and 10%, despite on-shelf costs rising by over 50%.
Fortunately, the plight of fresh produce growers is being heard. Dominic Morrey, commercial director for fresh food & commodities at Tesco, last week told the Lords Horticultural Sector committee that “the viability of our growers is crucially important” and it was in the retailer’s interest that growers received a “fair return”. He said Britain’s biggest supermarket had been working hard to make sure relationships with suppliers were “mutually sustainable”. He added that the 1% number wasn’t one with which he was familiar.
The effort currently made to increase the fortunes of growers is not enough. It is clear the current ways of working aren’t sustainable and the cost of the status quo could be enormous. In fact, BBG has predicted 18 million fewer punnets of British grown berries could be on shelves in 2024.
Resolution will come from sharing the risk
Resolution can only come if the rest of the supply chain takes on some of the risk. Piling all the pressure on growers is not only unfair, it risks destroying a very British industry and further reducing the amount of British produce on our tables, along with any hopes of self-sufficiency.
Solutions are already available. Making contracts as flexible as they are in Europe; preventing retailers from selling under the cost of production; or relaxing specifications on produce lines are just a handful of options, and will likely be considered in the government’s upcoming supply chain fairness review planned for the autumn.
Retailers should be warned and act now before being forced, because if similar reviews into milk and pork are anything to go by, the growers’ hands will likely be strengthened.
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