British berry producers have accused supermarkets that they are pocketing profits from higher soft fruit prices, and not compensating struggling producers fairly.
According to British Berry Growers (a trade group), retailers paid the same price per kilo for strawberries in 2022, despite an increase of 11 percent last year. The trend continued into 2023.
Supermarkets are under increasing pressure to increase their profit margins, as fuel and raw materials costs fall globally but grocery prices rise. Many food producers struggle to make ends meet due to high input costs, a tight labor market and persistently high fuel prices.
Nick Marston is the chair of BBG. “The squeeze that the British berry sector faces, with rising production and flat returns in supermarkets, seriously threatens [our] viability,” he said.
Growers have planted 8% fewer strawberries for the 2024 season. This would equate to approximately 9 million fewer punnets.
Marston stated that growers are increasingly looking to export markets, where they can earn a greater return. According to the results of a BBG member survey, they plan to export four-times as many berries by 2023 than in 2022.
“Growers do not make money.” He said that if they cannot make a profit they will slowly stop. The British fresh produce is low-value compared to other western countries.
The UK’s competition regulator warned this week that they would be looking at any attempts made by supermarkets to rebuild their profit margins, as the record-high inflation in food prices began to fall as a result.
According to Kantar research, grocery inflation has eased for the fourth consecutive month. It was down 14.9% in the four-week period ending July 9, compared with 16.5% the month before. This is a good sign for consumers who are feeling the pinch of the cost-of living crisis.
Supermarkets rebuffed allegations of “profiteering” by pointing out their own cost pressures, and low profit margins.
Andrew Opie said that the British Retail Consortium’s director of food sustainability, Andrew Opie, stated that the majority of the food purchased by retailers was British and they paid more for British products.
“However retailers also face additional costs and work incredibly hard in order to limit price hikes for consumers, during a crisis of cost-of-living where many people struggle to afford the necessities.”
As with the wider horticulture industry, the berry sector is also suffering from higher labour costs following the introduction of strict immigration rules for low-skilled employees after the UK exited the European Union.
Marston, of BBG, said that 50 percent of the price of a punnet berry went to labour. He also described the current scheme for seasonal workers as “clunky” and “dysfunctional”.
He called for an extension of the seasonal worker visa from six to nine months, and that growers be allowed to hire directly instead of through government-approved agents who charge fees.
The National Farmers’ Union estimates that last year up to £60mn worth of produce was wasted due to a shortage of fruit and vegetables pickers.