View our latest news on National Living Wage and the impacts it is having on our industries.
Often heralded as the start of the British strawberry season, Wimbledon 2016 will mark a huge change for strawberry farming, as the introduction of the National Living Wage (NLW) is putting the future of British strawberry farms in doubt.
With more than 140,000 servings sold during the Wimbledon fortnight each year*, traditional British strawberries and cream could soon become a lot more costly, warns Britain’s leading purchasing company, Beacon, as the NLW already threatens to wipe out 58% of growers’ profits.
Beacon, which represents around 2,000 independent businesses across the hospitality, leisure and care home markets as well as suppliers, including regional fresh produce businesses, is reporting that its suppliers expect the price of strawberries to rise this year due to the pressure of the NLW on British farmers, with some predicting the closure of British farms as it becomes an unprofitable operation. Something backed up by a recent National Farmers Union (NFU) ** report which states that the impact of the NLW could see growers lose up to 58% of their profits immediately and over the next four years cost fresh food businesses up to 158% of current business profit, making strawberry growing completely unprofitable for British farmers without additional Government support.
The situation echoes the seriousness of the ongoing milk price row last year when many dairy farmers were forced out of business after having their margins eroded by major retailers.
Other fresh produce farmers will also be affected by the change to NLW, with labour intensive farming industries likely to suffer the most. Farmers of salad essentials including lettuce, cucumber, peppers and cherry tomatoes are particularly under threat due to the impact of the NLW combined with rising production costs and supermarket price wars.
Marcel Roberti, Foodservice Sales Director at Total Produce, one of Beacon’s expert fresh food suppliers, commented:
“We represent many domestic, independent growers and the industry has definitely been hit hard by the introduction of the NLW. It’s hard for growers to see what more they can do, with many cutting overtime, considering the introduction of mechanisation in production and improving harvesting efficiency in any way they can. Our growers are telling us that strawberry profitability looks to be very badly affected by this new wage rate.”
Paul Connelly, Managing Director at Beacon, commented:
“It seems that strawberry fields may not be forever in the British countryside. Our suppliers are warning that the landscape of soft fruit farming and fresh produce is under threat with the possibility of cheaper foreign imports replacing British produce on supermarket shelves and on restaurant menus.
“We are working with our suppliers and customers to provide context to any price rises they might have to pass through and agree with the NFU in calling for the Government, and the wider supply chain, to support our fresh produce farmers through these wage changes.”
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* Wimbledon - http://www.wimbledon.com/en_GB/atoz/faq_and_facts_and_figures.html
** NFU Horticulture and Potatoes Board – Assessing the impact of National Living Wage on Horticultural Businesses - https://www.nfuonline.com/nfu-online/news/nfu-reports/assessing-the-impact-of-the-national-living-wage-on-horticultural-businesses-feb-2016/