Primary producers and processors are on the brink of collapsing under the pressure of squeezed profit margins, business leaders have claimed.
The situation is getting so bad, they say, that British supplies of common vegetables for use as ingredients in packaged foods could soon be a thing of the past.
Leading raw materials suppliers have told The Grocer that they, too, could be facing the axe unless prices throughout the food chain start increasing.
One well-known supplier, which supplies own-label manufacturers serving the big four multiples, said that the prices it was receiving were now so low that it had laid off more than a dozen staff in the last month and that its remaining 50-strong workforce was still facing further cuts.
The supplier, which asked not to be named for fear of losing trade, said: “It’s getting ridiculous. Supermarkets are squeezing their manufacturing suppliers who in turn squeeze us and we then have nothing worth offering our farmers.
“We now have no option but to pay £50 for a tonne of potatoes, which costs £45 a tonne to grow. After storage cost and delivery, the farmers who supply us are out of pocket but there’s nothing we can do.
“The same thing has been
happening in onions for years and 90% of what we now use is from Poland.”
Another supplier said: “We will be out of business within six months if the balance is not redressed. It’s hard to stomach when you read of supermarket profits that are running into billions of pounds.”
Ben Pinnington, spokesman for the Forum of Private Business, said producers at the lower end of the chain were paying for the ongoing price wars between the major multiples.
However, Kevin Hawkins, director general of the British Retail Consortium, said that warnings of British produce disappearing from the food chain were “nonsense”.
“There are probably too many processors in the first place,” said Hawkins. “Wherever you have too many suppliers chasing too little demand, there will always be casualties.”
The situation is getting so bad, they say, that British supplies of common vegetables for use as ingredients in packaged foods could soon be a thing of the past.
Leading raw materials suppliers have told The Grocer that they, too, could be facing the axe unless prices throughout the food chain start increasing.
One well-known supplier, which supplies own-label manufacturers serving the big four multiples, said that the prices it was receiving were now so low that it had laid off more than a dozen staff in the last month and that its remaining 50-strong workforce was still facing further cuts.
The supplier, which asked not to be named for fear of losing trade, said: “It’s getting ridiculous. Supermarkets are squeezing their manufacturing suppliers who in turn squeeze us and we then have nothing worth offering our farmers.
“We now have no option but to pay £50 for a tonne of potatoes, which costs £45 a tonne to grow. After storage cost and delivery, the farmers who supply us are out of pocket but there’s nothing we can do.
“The same thing has been
happening in onions for years and 90% of what we now use is from Poland.”
Another supplier said: “We will be out of business within six months if the balance is not redressed. It’s hard to stomach when you read of supermarket profits that are running into billions of pounds.”
Ben Pinnington, spokesman for the Forum of Private Business, said producers at the lower end of the chain were paying for the ongoing price wars between the major multiples.
However, Kevin Hawkins, director general of the British Retail Consortium, said that warnings of British produce disappearing from the food chain were “nonsense”.
“There are probably too many processors in the first place,” said Hawkins. “Wherever you have too many suppliers chasing too little demand, there will always be casualties.”
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