Inevitably, in a sector as diverse as horticulture, the impacts from the Middle East conflict are broad and varied but there is no doubt they are certainly being felt.
Many of the headlines have centred on the costs of fuel and fertiliser and, for some subsectors of horticulture, these will very much be the most impactful on farm.
In the protected sector and those with cold storage, the knock on impacts of the conflict to energy costs, both gas and electricity, will be the most acutely felt.
This coincides with the sharp rise in standing charges that came into effect at the beginning of April which has left growers facing a ‘double whammy’ of increased costs. Packaging and transport costs have risen significantly too; the list goes on.
“As the NFU has consistently called for, the 7 golden rules must now be embedded within the GSCOP so that the adjudicator can turn their watchful eye into more meaningful action.”
NFU Horticulture and Potatoes Board Chair Martin Emmett
Challenges in the supply chain
It is perhaps unsurprising, but no less frustrating as a result, that members are starting to report challenges around passing on any of the added costs within their supply chain.
We’ve been here before. In 2022/23, when we saw sharp rises in energy costs, many growers told us their buyers were either refusing to entertain CPI (cost price increase) discussions at all or were using multiple tactics to delay or undermine the members’ arguments.
The result? A decline in production and a period of empty shelves of core salad items.
The Groceries Code Adjudicator created the 7 golden rules to put a marker in the sand for how CPI requests should be managed and dealt with by buyers, but we’re being told by many members that buyer behaviour is mostly unchanged.
The recent GCA annual survey indicates an increase in ‘refusal or unreasonable delays in agreeing CPIs’, although only by one percentage point. I suspect if the survey were run again now, those figures would change again.
Real change needed
In recent years, we have started to see more long-term contracts agreed with UK growers across the retail supply chain which can and should be a good thing for the future of our sector.
But we continue to hear time and time again that the actions of buyers do not always reflect the corporate headlines.
As the NFU has consistently called for, the 7 golden rules must now be embedded within the GSCOP (Groceries Supply Code of Practice) so that the adjudicator can turn their watchful eye into more meaningful action.
Only then will real change occur.
