UK fresh produce leaders have waded into the row about the effect that poor prices paid by retailers could have on the long-term health of the supply chain.
As we revealed in The Grocer, (April 30, p10), growers in South Africa are increasingly disillusioned with supplying the UK and are seeking new, more profitable markets around the world.
Now the Fresh Produce Consortium has entered the debate, with president Alan McCutchion warning of the dangers of the multiples’ low price agenda.
Speaking at an industry conference, he said: “The drive to ignore the supply/demand equation in price setting is a great concern. Is it fair and
reasonable, when severe weather causes extensive and prolonged shortages, that the supplier cost of procuring is not reflected in the retail price?
“Retailers’ consistent and prolonged policy of ‘we will not be beaten on price’ and the deflationary spiral is making the UK uncompetitive in the world market and unprofitable for UK produce.
“There is a real danger that quality supply will not be available. Producers and exporters have alternative outlets and the UK is slipping down the list of their priority markets to supply.”
McCutchion said suppliers had already done much to prune costs, but were still having to cover increases in the cost of labour and power, while also investing in the systems required to meet the strict standards laid down by the multiples.
Elaine Alexander, CEO of the South African Table Grape Industry, added her voice to that of other disgruntled South African growers. Current practices were devaluing the table grapes category, she said, to the point where growers were going out of business. There was no longer any opportunity to make a premium, she added.
David Shapley
As we revealed in The Grocer, (April 30, p10), growers in South Africa are increasingly disillusioned with supplying the UK and are seeking new, more profitable markets around the world.
Now the Fresh Produce Consortium has entered the debate, with president Alan McCutchion warning of the dangers of the multiples’ low price agenda.
Speaking at an industry conference, he said: “The drive to ignore the supply/demand equation in price setting is a great concern. Is it fair and
reasonable, when severe weather causes extensive and prolonged shortages, that the supplier cost of procuring is not reflected in the retail price?
“Retailers’ consistent and prolonged policy of ‘we will not be beaten on price’ and the deflationary spiral is making the UK uncompetitive in the world market and unprofitable for UK produce.
“There is a real danger that quality supply will not be available. Producers and exporters have alternative outlets and the UK is slipping down the list of their priority markets to supply.”
McCutchion said suppliers had already done much to prune costs, but were still having to cover increases in the cost of labour and power, while also investing in the systems required to meet the strict standards laid down by the multiples.
Elaine Alexander, CEO of the South African Table Grape Industry, added her voice to that of other disgruntled South African growers. Current practices were devaluing the table grapes category, she said, to the point where growers were going out of business. There was no longer any opportunity to make a premium, she added.
David Shapley
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