Industry seeks assurances as another salad supplier goes bust
© Tim Scrivener Retailers must find ways to make the supply chain more sustainable or more growers and fresh produce businesses in the horticulture sector will go bust.
Jack Ward, chief executive of the British Growers Association, fired the warning as another major UK salad supplier announced it was winding up, throwing into turmoil the plans of its suppliers.
UK Salads has fallen into administration and ceased trading, with the loss of 200 jobs, blaming challenging operating conditions over the last few months.
See also: Ditching of English horticulture strategy ‘beggars belief’
The firm, which is based in Harlow, Essex, supplied fresh produce to major UK retailers including Aldi, and had a £69.2m turnover in the 2022 financial year.
But it has appointed FRP Advisory as administrators, who said “challenging trading conditions” had left the company “unable to meet its financial obligations”.
‘No one called me’
Tony Montalbano, a third-generation cucumber grower from Green Acres Salads in Roydon, Essex, grows baby cucumbers. He had been supplying UK Salads for a year when he found out about their problems.
“The day I finished planting the whole 3ha for UK Salads for this season was the same day the administrators went in,” he told Farmers Weekly.
“No one called me to tell me this was happening. I found this out through their staff.
“As ever, the grower takes all the risk. It’s a right mess. I have a week left until our first harvesting and I’m still trying to find a new supplier.”
It comes after Kent-based fruit grower Bardsley England, the UK’s second largest apple supplier to supermarkets, announced plans in January to cease trading later this year.
Mr Ward said it was “inevitable” more fresh salad companies would go bust because of the “relentless” drive by retailers to keep prices low.
“There has been virtually no inflation [price increases] in quite a few lines for fresh produce companies in the last five years, which means many have run out of road,” he explained.
“There has certainly been inflation from a retailer’s point of view, but there is an absolute failure from them to recognise this is happening.”
Increases in interest rates, energy and labour costs, including a 10% rise in the National Living Wage from April, are the main reasons why growers who supply these companies are also struggling, Mr Ward said.
“Consumers are getting an unrealistically competitive deal on most lines of fresh produce,” he added. “Prices have got to go up in the shops. The retailers have got to find ways to make their supply chains more sustainable.”
Sainbsury’s boss questions policy
Sainsbury’s chief executive, Simon Roberts, who was paid £4.95m in cash and shares last year, warned government policies designed to make the farming industry more sustainable, could result in more food imports.
Speaking to The Times newspaper, Mr Roberts said concerns about the future direction of policy and the new system of farm payments “have discouraged producers from investing”.
But a Defra spokesperson defended its agricultural policy, saying it is committed to supporting farmers and strengthening food security” and will invest £427m into grants to improve food productivity this year.
Government must give horticulture sector key assurances, says NFU
Rishi Sunak’s government declared its support for more home food production, and specifically for the horticulture sector, at its Farm to Fork summit at 10 Downing Street last May.
NFU Horticulture and Potatoes Board chairman Martin Emmett welcomed the commitment from Mr Sunak to launch a review into supply chain fairness.
Otherwise, he said there is a lack of “tangible evidence” of support from the government for the UK horticulture sector.
Mr Emmett said the “key concern” for horticulture businesses is uncertainty over the future of the Seasonal Worker Scheme (SWS), which will supply more than 45,000 visas for temporary workers in the horticulture sector this year.
The NFU has called for a five-year SWS rolling programme and for visas to last for nine months, to give growers the confidence to invest in their businesses.
The Conservative government has pledged to keep the scheme in place until the end of 2024, but there are no assurances beyond this.
Second, Mr Emmett said exemptions from biodiversity net gain (BNG) requirements must be extended to greenhouses and protected cropping structures.
Third, horticultural businesses need assurances that they will be protected from future energy price shocks.
“It’s time for government to come good on its commitment to growing the horticulture sector,” Mr Emmett said.