Further Food Shortages Could Increase The Pricing Pressure In Britain

When mounting costs and unpredictability in the weather damage domestic output, Britons—who are already feeling the effects of the greatest increase in food prices since 1977—may have to adjust to shortages of fresh veggies.

Tomatoes, cucumbers, and peppers have been in short supply for British consumers in recent weeks due to interrupted harvests in North Africa and inflation forcing industry purchasers to spend more on less from important markets like Spain.

According to tax office data, the United Kingdom imported 266,273 tonnes of vegetables in January 2023, the least since 2010, when the population was almost 7% lower than it is today.

To make matters worse, this year’s UK production of salad ingredients is predicted to reach a record low as British farmers are discouraged from growing crops in greenhouses due to the high cost of energy.

The challenging economic environment has contributed to British food price inflation reaching levels not seen in nearly 50 years.

The difficulty for policymakers was highlighted by industry data released on Tuesday by market researcher Kantar, which revealed that UK grocery price inflation reached a record 17.5% in the four weeks leading up to March 19.

Knowing that their consumers cannot afford to spend as much, many UK food businesses are making less purchases, which reduces their earnings.

The future of British fresh food producers is currently in doubt, according to Jack Ward, CEO of the British Growers Association.

“There’s a limit to how long growers can carry on producing stuff at a loss,” he said.

Due to the summer drought and winter frosts, growers, farming unions, and shop owners warn of impending shortages that may soon affect other homegrown vegetables including leeks, cauliflower, and carrots.

Normally, the UK imports roughly 95% of its tomatoes in March, but from June through September, that number reduces to 40%.

The warnings follow the rationing of egg sales by supermarkets in the latter part of last year, and the cost constraint that has put many pig and poultry farms out of business.

The number of trees being planted is insufficient, according to apple and pear growers, to maintain orchards.

The salad crisis has highlighted the fragile nature of Britain’s fresh produce business, despite assurances from the government and supermarkets over supplies.

According to Lee Stiles, secretary of the Lea Valley Growers Association, 10% of the membership stopped doing business last year although its members grow nearly three-quarters of the cucumber and sweet pepper harvest in Britain. By March, only around half of members had planted.

“There are real risks that empty shelves may become more commonplace,” Minette Batters, president of the National Farmers Union, said.

The union has been warning about the dangers of leaving horticulture out of a government program that helps businesses that are having trouble paying their energy costs for months. The union anticipates that by 2023, UK production of salad ingredients will be at its lowest level since records have been kept, in the year 1985.

According to Ward, margins in fresh produce were typically between one and two percent, but this year they have decreased because of increased labor, energy, and fuel prices.

For many retailers, their success in purchasing produce from other countries will determine their ability to avoid shortages.

One producer who also imports and packs products told the media that this can be difficult by UK supermarkets’ practice of establishing prices for the entire season while their European Union rivals are more flexible.

More paperwork as a result of Britain’s exit from the bloc has deterred drivers from traveling to the UK, which may possibly be the reason why grocery shelves in continental Europe are still largely supplied.

The British Retail Consortium, which represents the major food retailers, and its head of food and sustainability, Andrew Opie, said shops were confident in the resiliency of the food supply chains, particularly with the approaching UK growing season. Smaller stores, though, are under pressure.

(Adapted from Reuters.com)

Categories: Economy & Finance, Entrepreneurship, Regulations & Legal, Sustainability

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