Written Evidence submitted by The Fresh Produce Consortium (LS0038)
1. The Fresh Produce Consortium is the UK’s trade association for the fresh produce sector, including fresh fruit, vegetables, cut flowers and plants. We have over 600 members, representing 80% of the UK fresh produce supply chain. Members include multiple retailers; importers; wholesale markets; food service businesses; processors; packers; distributors; growers; and other business supporting the UK fresh produce industry.
2. We have given evidence in the past to the Environment Food and Rural Affairs Select Committee on labour constraints affecting the UK fresh produce supply chain, and in relation to problems recruiting temporary workers during 2020. It is true to say that the industry faces the same issues, despite immense efforts in the interim to recruit additional British workers.
3. We have worked with other trade associations within the UK food and drink sector to seek solutions to this widespread challenge and to ask the UK Government to support us. Recently the UK food and drink industry published a report ‘Establishing the labour availability issues of the UK Food and Drink Sector’ (August 2021: https://www.fdf.org.uk/fdf/resources/publications/reports/establishing-the-labour-availability-issues-of-the-uk-food-and-drink-sector/ )
We would ask the Committee to take into account the recommendations of this report, in particular the key ask for the UK Government to create a 12 month Covid 19 Recovery visa in order to alleviate the labour shortages.
This short term response will enable the sector to work with UK Government and the devolved administrations in parallel on a package of measures that support training and skills development, the adoption of new technologies and career promotion. It is a package of measures that will enable the sector to transition to a more stable long term footing and with it continue to support the economic recovery and growth of the UK.
4. Labour shortages are occurring across the UK fresh produce supply chain and affect both temporary and permanent roles:
Examples of the range of roles which are experiencing shortages
No experience required
Line Leaders/Machine Operatives
Printroom and Packaging Management
Salaried Office based
The number of applicants for a vacancy has dropped and the quality of candidates has reduced over the past few years. Roles are taking longer to fill and it has been especially difficult to fill low skill roles. The level of turnover of staff has increased.
The same issues are being reported across all the English regions, Scotland and Wales.
Our members report that they are constantly experiencing shortages in supply of temporary workers from agencies. Instead of using one labour provider, they are using up to seven different agencies to try to fill positions. This results in significant additional administration, with time sheets having to be approved manually and verified, balancing staff orders between agencies, confirming actual supply, invoicing, as well as increased number of audits against all seven agencies. This is not a sustainable practice.
The shortages have resulted in being unable to run a shift in a production area which threatened the fulfilment of the customer’s order.
Members are taking as an flexible approach as they can to their existing models and adapting the mix of direct employment, permanent contracts, fixed term contracts and agency staff on zero hour contracts, as well as increased flexibility around shift patterns to extend availability of labour pool.
5. Lack of HGV drivers means that the supply or collection of raw materials and finished product may be delayed. This is a fundamental issue for fresh produce which is highly perishable and has a short shelf-life.
One company reported having its logistics company refuse at short notice to deliver a product because it was not viable for them as they did not have sufficient drivers. Similar issues are reported at weekends when drivers are reluctant to work over these periods.
Companies advise that they are having to pay considerably more to secure transportation (with around a 25 per cent increase in recent weeks, and further increases anticipated). Like many other sectors the UK fresh produce industry is experiencing immense difficulties due to the shortage of drivers. While some direct government assistance has been put in place the feeling is that this is too little too late to meet oncoming demand for 2021/2022.
6. Seasonal peaks for Christmas 2021, Mother’s Day (for cut flower sector) and Easter in 2022 will require additional labour to enable companies to fill production volumes to meet consumer demand.
There will be further issues in fulfilling supermarket orders and this could leave suppliers with either too much stock or shelves being empty.
Increased levels of surplus stock will result in additional food waste where alternative uses cannot be found, particularly when the availability of transportation is constricted.
7. The UK fresh produce industry has taken several approaches to cope with labour shortages:
Revision of pay rates which result in additional costs of £1.5 million over 13 months for one company.
Incurring additional costs of using a third party packing facility to spread risk and covering overtime is around £10,000 a week for the same company.
Packing produce in different locations to be able to draw on a different pool of people.
Introducing different shift patterns.
Introducing training schemes, translating communications in multiple languages, lowering the entry level for English.
Offering apprenticeship schemes to upskill workers and gain their commitment to stay with company.
8. Some companies are endeavouring to accelerate their automation projects, but the impact of these will not be seen for at least 18-24 months. Currently agri-tech is viewed as a costly investment and, in some cases, unproven. In addition, it is perceived to be a very risky investment against the background of customers giving short-term contracts across the supply chain. More government guarantee schemes to help companies invest in automation would be beneficial.
9. There have been calls to extend the scope of the Youth Mobility Scheme. Members reported having tried to use government support, such as the UK Government’s Kick Start Scheme. This has proved limited as a company is not allowed to use candidates to replace roles which are already advertised.
10. The Committee asks what the impact the timetable for introducing physical checks at the border on food and live animal imports from the EU will have on the current issues being experienced by the UK food supply chain.
Over 60 per cent of fresh produce is imported to the UK, with half of that coming from the EU. Therefore the UK food security is dependent upon imports originating or transiting the EU.
The UK Government has revised once again its timetable for fresh fruit and vegetables imported from the EU. From 1 January 2022 UK importers will need to pre-notify their consignments using a system – IPAFFS – which is new to the majority of traders. A phytosanitary certificate will be required from July 2022 when physical checks at the border will be introduced.
There are concerns that both UK importers and EU exporters may not prepare in time for the implementation of these requirements on the basis that a considerable level of information on official processes remains outstanding and unproven. The sector has seen the timetable deferred on previous occasions and therefore questions whether it will take place according to the latest timetable. These requirements require additional administration and resource and companies may be reluctant to take such steps if they feel that there is any uncertainty, particularly against the backdrop of other commercial pressures. Those companies which had prepared for previous deadlines are frustrated that their commitment and investment was wasted effort at the time.
Border Control Points have specific authorisations to check and clear certain types of products. Defra has advised that we may not know which BCPs can be used to clear fresh produce until March 2022. This hampers early commercial decision making on preparations on which routes may be used. In addition, costs will be set by individual BCPs and no information is available yet on their pricing structures.
There are concerns that APHA and Port Health Authorities will not be resourced sufficiently and information on Service Level Agreements on the inspection services are at the time of writing not available to the industry.
The additional cost pressures are substantial and without fundamental increases in cost prices businesses will have no choice but to reduce the output of UK food production. This drop in UK grown produce will lower UK self- sufficiency even further.
The introduction of a Covid-19 recovery visa will underpin the essential need for UK food production. It will also support a managed transition by facilitating adequate time for businesses to develop and adopt the technology needed to support a higher skilled sector, thereby reducing its greater level of dependency on labour.