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Rising costs and limited returns from retailers have meant the berry sector is currently not ‘financially viable’

Britain’s berry sector is “financially unsustainable” growers have warned, as new data reveals many supermarkets are under-indexing on British-grown stock.

Rising costs and limited returns from retailers have meant the berry sector is currently not “financially viable”, said Angus Soft Fruits MD John Gray, after costs had risen by 30% in the past three years without being matched by returns.

“We need higher returns, simply put,” he told The Grocer.

The lack of returns had pushed confidence in the sector down, which had led to a decrease in plantings, he warned.

“We have seen a trend over the past three or four years where growers have been leaving the industry because soft fruit production is a high-input [crop],” he said, highlighting the high financial input costs and risks, including infrastructure investments, wages and crop performance.

“Unfortunately, as it stands there is likely to be significantly less production of British berries over the next two to three years,” he said.

“When you think about the weather and the different outcomes you can have in farming, farmers and growers are very resilient, adaptable and flexible but there is no doubt the current economic situation is pushing that to the limit,” he added.

Retailers have a role to play in this, as despite returns increasing by 0% according to data from British Berry Growers, some retail lines have increased in price by up to 28% in the last year, according to analysis of Assosia data by The Grocer.

“We appreciate [retail] inflation is only going to be modest, but it is about sharing that and giving growers better prices, at least helping in terms of their increased costs,” Nick Marston, chairman of BBG, told The Grocer.

According to The Grocer’s Key Value Items tracker (see below), blueberries have seen few price increases, with own label lines in Asda, Lidl and Tesco static year on year.

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But Marston added there was a “strong feeling” in the marketplace that where retailers have had to pay more, such as on branded products, they have done but “on products where they don’t believe they need to pay more they are not and that does risk diminishing the industry”.

“If it was to continue year after year, it would mean we would not have enough British berries, and unlike some crops we can’t go elsewhere for them at the volumes we need and the prices this market wants to pay,” he said.

The industry body, which represents 95% of British berry growers, published new retailer rankings this week demonstrating a comparison between the amount of British berries stocked compared to grocery market share.

As of 20 July, Lidl was the largest single supermarket to top the charts for total berries sold compared to its market share, followed by Aldi, Waitrose and Co-op.

Asda had the biggest discrepancy between its grocery market share (13.7%) and the percentage of all British berries sold to UK supermarkets (5.5%) in the latest data charts of the summer season.  

“I don’t see any move at the moment from the retailers to help growers in terms of the massive cost increases they face,” said Marston.

However it is not only down to retailers, Gray explained. Labour makes up 50% of berry growers’ costs which have risen each year with the national minimum wage, and “that is not helped by the constraints around the SAWS [seasonal worker] scheme”.

He echoed calls from BBG that the government-led seasonal worker scheme needed to be given more long-term security, have a reduced cost and increased length from six months to nine months as now it “doesn’t quite align with our harvest”.