Aldi - fruit and veg

According to data from Nationwide Produce, the spot price for boxes of some vegetables are up two or three times as much as the normal rate

Supermarkets are set to face mounting shortages of fruit & veg over the coming weeks as a combination of bad weather and logistics issues start to bite.

Shoppers have been reporting a spate of empty produce shelves in the mults over the past few days, with one key fruit & veg supplier warning the supply chain issues are driving “exceptionally” high wholesale prices.

According to data from Nationwide Produce, the spot price for boxes of some vegetables are up two or three times as much as the normal rate at this time of year, with crops such as Dutch onions up from an average of £250-£280 per tonne to £700 per tonne.

Other significant price hike include a rise from an average of £5-£6 per box to £17 per box for cherry tomatoes. Aubergines are up from £6-£8 to £18 per box and yellow peppers are up from £8-£9 to £22 per box.

“I can honestly say that in the 40 years I’ve been in this trade, I’ve never seen such high prices across such a broad range of products for such a prolonged period of time,” said Tim O’Malley, group MD of Nationwide Produce.

He explained that due to the abnormal weather conditions, beginning with a drought and high temperatures in the summer before a mild autumn and a severe frost over winter, crops across the UK, Europe and parts of North Africa had been affected.

This has even affected products for which the UK can typically supply itself year-round, including carrots, cabbage and cauliflower. “There is no way” UK supply would be sufficient this year, said O’Malley.

The situation was likely to lead to a “big import window, and import equals expensive” according to O’Malley. He predicted the amount of produce the nation imported was likely to rise from 67% on average to 75%.

For example, the UK-grown yield of onions – of which the UK typically grow 450,000 tonnes annually – is down to 350,000, meaning an extra 100,000 tonnes will have to be imported to meet UK consumer demand. O’Malley predicted that far greater than normal volumes would have to come from Egypt, Chile, South Africa, New Zealand and Tasmania. “Not great for climate change, is it?” he said.

Such a scenario would also likely increase costs. O’Malley said retailers were likely going to be forced to pay more as “if there is one thing shoppers loathe, it is empty shelves, particularly for staple veg lines”.

As The Grocer has previously reported, this latest bout of issues is resulting in growers considering their future in the sector.

“As an industry, we have suffered massive deflation, year on year on year on year, and I think the British consumer is going to have to start paying a realistic price for fruit & veg, otherwise UK growers will continue to pull out of growing fresh produce, which simply means less home-grown fruit & veg and more imports,” said O’Malley.

“The risk to reward factor is just getting ridiculous,” he said, with “a lot of growers pulling out of growing veg. We’re now seeing thousands of hectares per year being converted into growing crops other than veg, mainly cereals.”

His comments were echoed by Jack Ward, CEO of the British Growers Association, who said some growers had walked away from veg, swapping instead to wheat, which had a lower risk profile and was “a lot less hassle”.

While weather had been an issue, he said, “growers always have to contend with the weather. One of the biggest issues is do we have confidence in the supply chain that it will reward us adequately for the risk we are taking?”

This confidence was now not high enough. “We have used this practice of scouring the world for a cheaper source of product to beat down the price and the confidence of UK growers and now we are getting to the point where those supply lines are beginning to break down.

“What we have done is stripped out all of the value from the fresh produce category,” O’Malley added. There was “nowhere left to hide” as fresh produce inflation was significantly lower than other grocery lines, he said.

Looking to the future, Ward said “we have got to find a way of restoring value to the fresh produce sector because that is what is at the bottom of it”.

“People have got to get a proper reward for the risk they are taking. If that reward doesn’t underwrite those risks, don’t expect them to take those risks.”  

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