Apple growers have become the latest fresh food suppliers to warn soaring production costs “must be absorbed” in order to keep them in business.
The sector had seen an increase in the cost of production of up to 25% over the past year, said British Apples & Pears at an online event last week.
The trade body added growers were estimating they would need to see the wholesale price of six apples paid by retailers grow by a minimum of 18% in order to safeguard supply this year as a result of inflationary pressures (the equivalent of a 15p increase to £1).
One of the main drivers of the rise in the cost of production was labour, which BAP said had risen by 242% since 1999.
Labour used to account for 24% of turnover but was now almost 40%, which was a “massive difference in terms of proportion and only going one way”, said BAP executive chair Ali Capper. “It is going up a lot.”
Earlier this year, the UK government announced that the minimum wage for UK seasonal workers would rise to £10.10 per hour up from £8.91, a rise of 13.5%. There is also concern within the industry that growers will see labour shortages due to delays in Home Office processing and that most will not be returnees, which is expected will see productivity (and returns) fall.
Other costs to have risen include electricity, crucial for the storing of apples, seeing an 100% increase on average, while container costs had risen by between 2,000% and 3,000%, Capper added.
While she acknowledged that numbers were “difficult to get a hold on” due to the variations from business to business, the BAP panel and board, which included Worldwide Fruits, Bardsley England and Adrian Cripps agreed the average production cost for businesses was rising by 20%-25%.
The organisation held its annual trade event last week, where growers updated UK retail representatives and the trade on the coming 2022 season, the challenges facing the industry and the success of British top fruit.
During the webinar, BAP discussed the “unprecedented labour and inflation issues facing the industry and the need for wider support” to help growers face these challenges and for them to be able to invest in the future.
“2022 is set to be one of the toughest-ever years for growers and the webinar was an important opportunity for us to highlight the issues ahead and speak directly to the industry,” Capper said.
“The country is experiencing a hard time financially and the rate of inflation in costs is one that growers have not seen before in their lifetime,” she added.
“The good news is that we have the opportunity to build on self-sufficiency and increase the sales of dessert apples sold in the UK, so now is the time to work together, supporting growers and committing to the future of British apples.”
The webinar also included details of the promotional activity for 2022, which will focus on three key themes: heart health, affordability and sustainability, with affordability a key factor due to the cost of living crisis.
The British apple and pear season will start officially on 3 October.