The founder of one of Britain’s biggest food producers has claimed that supermarket shelves in the UK will be bare and panic buying will intensify unless critical issues currently threatening food supplies are solved promptly.
Ranjit Singh Boparan, founder and President at 2 Sisters Food Group, highlighted that the current challenges facing the sector are like no other he has seen in his 27 years in the food industry.
Boparan said: “I have seen lots of change over the years – but nothing compares to now. The use of the term ‘perfect storm’ has become a cliché, but never has that been a truer phase to use. No-one could possibly have predicted that this toxic cocktail would come together at this time. It started with the pandemic – and in the last week or so with ‘pingdemic’, but since May this year the operating environment has deteriorated so profoundly I can see no other outcome than major food shortages in the UK. Supply of chicken and turkey is under threat. Our retail partners and the wider supply chain have worked together closer than ever before to ensure we retain food supply and this is of huge credit to everyone. But we are at crisis point.
“We are operating in a framework that’s complete madness and the Government needs calling out for sticking their heads in the sand. ‘Pingdemic’ is not the issue for us. There’s fundamental structural changes going on here that need sorting. Why is the Government still paying furlough to around two million people with the economy essentially open and yet we have an on-going labour crisis? Why is it not reclassifying our frontline workers to the correct status so we have a corridor open for EU workers into the UK? Why is it not allowing for key workers in the food industry who are double vaccinated to continue their work when they are “pinged”? The government needs to act immediately if it wants to avoid the most serious food shortages that this country has seen in over 75 years. Not acting would be irresponsible.”
Boparan spelt out some of the current challenges facing his business and the wider food and retail sector.
This includes Brexit significantly reducing available workers across the food sector. He highlighted that 2 Sisters has seen, on average, 15% labour shortages for its 16,000 workforce this year, the majority who work in chicken and ready meal production facilities.
The food sector has also suffered major hits from ingredients inflation, as well as higher energy and equipment costs. And 2 Sisters has seen “unprecedented wage inflation” across its supply chain in skilled roles covering production and farming, to logistics and delivery.
2 Sisters is also having to continue investing in measures to keep its staff safe, regardless of the Government lifting the Covid restrictions for the public. Like other firms, the rules around self-isolation are said to be compounding the labour shortage issue even further.
Meanwhile, Boparan stated that Brexit has not been a success. He highlighted that trading conditions with the new regime for import and export have increased complexity and administration, with this set to continue indefinitely, causing major on-cost and resource difficulties.
Boparan said: “These are unique, era-defining challenges which we started to tackle head on last year. But they’ve all come to a head in the past 12 weeks. Clearly these have brought continued and intensive pressure on our business, just like they have elsewhere.
“This cannot be sustained indefinitely. The critical labour issue alone means we walk a tightrope every week at the moment. We’re just about coping, but I can see if no support is forthcoming – and urgently – from Government, then shelves will be empty, food waste will rocket simply because it cannot be processed, or delivered, and the shortages we saw last year will be peanuts in comparison to what could come.”
Boparan called on the Government to act now to support the sector given its unprecedented challenges.
He added: “Entry-level – that’s broadly unskilled – roles (requiring a Level 2 qualification) are where the sector is facing greatest difficulty. Poultry workers should be exempt from this and Government needs to think again on the entry thresholds for salaries and skills.
“What needs to happen is an entry route should be plotted so workers face minimal administrative hurdles to get through to support businesses like ours.
“We also need recognition from the entire supply chain – that’s our suppliers, customers and ultimately the end consumer – that without the correct level of support, we are potentially facing a food crisis in the UK like we’ve never seen before.”
NAM Implications:
- ‘Perfect storm’ of causes will have a ‘perfect storm’ of effects:
- Labour shortages = increased labour costs
- Ingredients shortages = increased costs
- Energy demands = increased costs
- Bureaucracy increases = increased costs
- Stockpiling increases = increased costs
- Do you really think all will be contained within official ‘inflationary adjustments’
- i.e. Budget for more than a 5% shelf-price increase.
- Your category, your call…
