UK Berry Growers Accuse Supermarkets of Profiteering, Threatening Industry’s Viability
The food and beverage industry is witnessing several important trends, including shifting food manufacturing techniques, advancements in food processing technology, evolving food distribution strategies, and innovative approaches to sustainability within the food and drink sector. Impacting these trends are the current regulations governing food and drink production, as well as the latest developments in food and drink packaging, marketing, and consumer preferences.
In light of these trends, trade body British Berry Growers (BBG) has raised concerns over supermarkets’ practices, accusing them of profiteering and posing a serious threat to the viability of the British berry industry. According to a report by BBG, supermarkets have raised the average price of berries by 11% between May and September 2022 for consumers, while failing to increase the prices paid to the growers.
BBG represents approximately 95% of British berries sold in the UK, and it highlights the significance of fresh berries in the nation’s shopping baskets. Currently, fresh berries hold the largest market share (28%) among all fruit sold in the UK. However, the industry is under pressure due to supermarkets’ failure to meet the growers’ rising costs of production.
Nick Marston, chairman of BBBG, expressed his concern over the situation, stating, “The squeeze on the British berry industry, which faces rising production costs and flat returns from supermarkets, is seriously threatening the viability of the British berry industry. If we don’t address this disconnect, British berry growers will start reducing their production or leaving the industry altogether, as they are unable to generate profit. This is a situation that none of us desires, especially consumers who have a genuine fondness for and interest in buying and consuming British berries.”
A report from market researcher Kantar indicates that UK grocery inflation has continued to ease for the fourth consecutive month. The data reveals a decrease of 1.6 percentage points to 14.9% in grocery price inflation for the four weeks up to 9 July. Meanwhile, a survey conducted by BBG in June prophesies an 8% reduction in the number of strawberry plants planned for 2024, leading to an estimated decline of 12 million plants and nine million fewer punnets.
Marston emphasized that these projections underscore the urgency for collective action to ensure the long-term sustainability of the industry. He stated, “The berry category has experienced consistent growth historically, but growers’ profitability has plummeted to an all-time low. If the returns from supermarkets continue to neglect growers’ soaring costs, more and more growers will be compelled to cut down their production, explore export opportunities, or shift to cultivating alternative crops.”
BBG further highlights the growing trend of growers seeking opportunities in export markets. The same BBG survey indicates that UK growers plan to export four times as many berries in 2023 compared to 2022.
In response to BBG’s concerns, Andrew Opie, the director of food and sustainability at the British Retail Consortium (BRC), said that food retailers predominantly source their produce from the UK. He affirmed, “Given the current pressure on British farmers, retailers are paying higher prices for their produce. However, retailers are also dealing with additional costs and are working tirelessly to limit price hikes during this cost-of-living crisis, where many individuals are struggling to afford essentials.”
Last week, the UK’s competition regulator concluded that supermarkets are not excessively profiting from the increased grocery prices. Nonetheless, the regulator called for reforms in how retailers price their goods.
