If producers reduced their costs and targeted the markets of weaker competitors, they should be able to increase their profits, said David Pattison, analyst at Plimsoll Publishing. At the top end of the fresh produce market were 81 highly profitable companies with margins of over 10%, Plimsoll reported, although many other businesses in the sector were on 2% and under.
Some 30% of the total market was now shared by the top 15 companies, who would look to grow by targeting smaller, high-growth and high-margin rivals, Pattison added.
At least 150 fresh produce companies were in a strong position to grow sales, he argued. "Going on the offensive may be the best defence and key to this will be targeting weakened, low-margin and heavily indebted rivals."