British berry growers accuse supermarkets of pocketing soft fruit profits

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British berry growers have accused supermarkets of pocketing the profits of higher soft fruit prices and failing to fairly compensate struggling producers. 

Retailers paid the same price for strawberries throughout 2022 despite an 11 per cent increase in the average per kilo selling price last year, according to the trade body British Berry Growers, who said the trend had continued into 2023.

Supermarkets have faced increasing scrutiny over their profit margins as global fuel and raw material costs start to fall but grocery prices continue to rise. Meanwhile, many food producers are struggling to break even amid persistently high input costs and a tight labour market.

“The squeeze on the British berry industry, which faces rising production costs and flat returns from supermarkets, is seriously threatening [our] viability,” said Nick Marston, chair of the BBG.

Shoppers could see fewer British strawberries on supermarket shelves next summer after growers planted 8 per cent fewer crops for the 2024 season, which would amount to an estimated 9mn fewer punnets.

Marston said growers were increasingly turning to export markets where they could make a higher return. They plan to export four times as many berries in 2023 as in 2022, according to results of a BBG survey of their members shared with the Financial Times. 

“Growers are not making money. If they can’t make a profit, then slowly they will stop doing it,” he said. “The British fresh produce market is very low value compared to most western countries.” 

The UK’s competition watchdog warned supermarkets this week that it would examine any attempts to rebuild profit margins as record-high food inflation started to slow as a result of falling costs. 

Grocery inflation eased for a fourth consecutive month, down 14.9 per cent in the four weeks to July 9 compared to 16.5 per cent in the previous month according to research company Kantar, in a welcome sign for shoppers squeezed by the cost of living crisis. 

Supermarkets have rebuffed accusations of “profiteering”, pointing to their own cost pressures and low-profit margins. 

Andrew Opie, director of food and sustainability at industry group the British Retail Consortium, said retailers sourced the vast majority of their food from the UK and that they were paying more for British produce. 

“However, retailers are also facing additional costs and are working incredibly hard to limit price increases for consumers during a cost of living crisis where many people are struggling to afford the essentials.” 

The berry industry, like the wider horticulture sector, is also struggling with higher labour costs since the introduction of tough immigration rules on low-skilled workers after the UK left the European Union.

The BBG’s Marston said 50 per cent of the cost of a punnet of berries went towards labour and that the current seasonal worker scheme was “clunky and dysfunctional”.

He called for the six-month seasonal worker visa to be extended to nine months and for growers to be able to recruit directly rather than from government-approved operators who charge fees.

Last year, the National Farmers’ Union estimated that up to £60mn of produce was thrown away because of a lack of fruit and vegetable pickers.