In strongly worded intervention into the current supply chain crisis, the Founder and President of the 2 Sisters Food Group has said that food in the UK is too cheap and prices need to reflect the spiralling costs faced by manufacturers.
Ranjit Singh Boparan highlighted that current rampant inflation combined with the continuing lack of labour will ultimately result in higher prices for the long term.
He said: “The days when you could feed a family of four with a £3 chicken are coming to an end. We need transparent, honest pricing. This is a reset and we need to spell out what this will mean.
“Food is too cheap, there’s no point avoiding the issue. In relative terms, a chicken today is cheaper to buy than it was 20 years ago. How can it be right that a whole chicken costs less than a pint of beer? You’re looking at a different world from now on where the shopper pays more.”
2 Sisters Food Group and its subsidiary Bernard Matthews produces about a third of all the poultry products consumed in the UK.
Three months ago, Boparan called on the Government to take action to help with labour shortages that were impacting the production of meat. However, he said yesterday that ministers can’t fix all the problems, nor can they control inflation, adding that the industry needs to be honest about the long-term implications.
“Less labour means less choice, core ranges, empty shelves and wage inflation, and this isn’t going to change,” said Boparan.
“We need to work with our supply chains and customers to solve these issues, but it will come at a cost. At the same time, I need to invest, increase automation, and make our factories more welcoming for new recruits, which are longer-term goals. But right now I need to be honest about what this means for the consumer as inflation could reach double digits.”
Boparan outlined the inflationary pressures his business is facing throughout the supply chain. These include feed costs for chickens rising 15%, more expensive transport due to the HGV driver shortage, energy costs in its farms and factories jumping over 500% since last year, the price of CO2 rising 4-500% in the past three weeks, and cost of food packaging up 20% in the last six months.
Boparan added: “Inflation is decaying the food sector’s supply chain infrastructure and its ability to operate as normal. That’s from farm to your plate. There’s hundreds of farmers out there struggling, and they need our support just as much as anyone. Talk of ‘year zero’ might sound dramatic, but these are the facts: we really have to start thinking differently about what our food priorities are and what they cost.”
He concluded: “I’m optimistic about our chances of seeing this through, and it’ll need a lot of hard work with everyone from our suppliers, their suppliers, to our customers and the consumer. But I think there’s a willingness to work together and sort this now, rather than waiting and seeing the British food sector wither and die. I don’t want that to happen – I want to be one of the first to face into a crisis that’s not going away and solve it.”
Boparan is the latest in a long line of producers warning of food price inflation as global commodity price increases, production issues, and supply chain disruption in the wake of the pandemic take their toll. Earlier this week, the boss of Kraft Heinz said that consumers will have to get used to higher food prices
Latest industry data released by Kantar revealed that grocery prices in the UK had risen 1.7% in the past four weeks compared with last year.
NAM Implications:
- Hopefully, the UK public will appreciate that this re-set, and all that goes with it…
- …’is for their own good’.
- And blame it on the politicians…
- …and not suppliers and retailers!
