The impact of a turbulent 2016 for the fresh produce market is now beginning to be felt, with major supermarkets facing stock shortages of courgettes, and implementing rationing to iceberg lettuce. Britain’s leading purchasing company, Beacon has said that the full impact is yet to be felt following a “perfect storm” in the supply chain last year.
Suppliers of fresh produce are proposing price increases of record proportions, up to 140%, including crops such as courgettes, broccoli, aubergines, peppers, spinach, tomatoes and lettuce varieties.
Paul Connelly, Managing Director at Beacon, commented:
“Adverse weather conditions across Europe severely damaged crops last year, so it was inevitable that we would reach crisis point this year. Reports from our fresh produce suppliers show that floods in Spain’s south-eastern Murcia region, which supplies 80% of Europe’s fresh produce at this time of year, has meant that many field crops such as lettuce and broccoli have been nearly wiped out, culminating in this shortage and significant price hikes. Add to this the inflationary pressures that have come with the devalued pound in relation to Brexit and increased labour costs as NLW continues to rise and the significance of this crisis for manufacturers becomes clear.
It isn’t just fresh produce either, these poor harvests will soon be felt in the frozen aisles, with suppliers reporting losses in pea harvests in the eight weeks to July 2016 of around 20% as key growing areas in France, Belgium & Holland were badly affected by heavy rains and floods.
“Given how badly damaged some crops and growing areas were, we can’t see that the market will stabilise any time soon. We would strongly suggest operators work closely with their suppliers and any outside support if needed, to closely monitor the market as we move through 2017.
“The perfect price storm is likely to last well into 2017 and impact other British favourite foods and drinks – as Brexit starts to bite too. We expect 2017 to be a difficult year for many of our favourite foods. Coffee (up to 10% price increases), fresh fruit and vegetables (up to 140% price increases), fish (salmon up to 16% reported price increases and prawns up to 15% increases), potatoes, chocolate and even wine have had supply chain difficulties in 2016, which could result in increased prices for 2017. We also anticipate price increases to beer, due to duty impacts, and inflationary pressures linked to Brexit and currency fluctuations.”