The start of a new year often provides an opportunity for reflection, followed by a burst of renewed energy for the year ahead. This year, however, that moment of reflection has been delayed somewhat due to a number of rather critical issues demanding our attention over the last few weeks.
With consultations from both AHDB and Red Tractor closing early in January, and an urgent review of the impacts of promotions following the surprisingly aggressive price wars on veg in December, the NFU Horticulture and Potatoes board has certainly been hard at work.
When we first saw packs of veg on sale in the supermarkets for as little as 19p, well below the cost of production, it was little wonder we had members on the phone saying enough is enough. While promotions can, and do, help to shift volumes, it is hard to see how this type of pricing strategy can have any positive benefits for the industry in the long term. There is little doubt that consumer expectations will soon shift if these promotions continue. And it could well create a vicious cycle where consumers demand lower prices all year round, having seen it on sale at half the price when on promotion. This will create volatility by shifting consumer buying patterns and create difficulties on farm which can easily wipe out profits.
At times like this, the recommendations the NFU made in its Catalyst for Change report really come to the fore. We have already begun engagement with retailers over the last few weeks and want to get to the bottom of their promotional strategies. We cannot afford to allow short term price promotions to damage the industry in the long term. It would seem a period of reflection from retailers on this issue is long overdue.
It would be fair to say that AHDB’s period of reflection came a couple of years ago when a new team came in at the top and set about building a new structure that will help deliver better results for levy payers. The recent launch of its strategy showed how far they have come in setting the foundations for an efficient and focussed organisation, though it is fair to say that levy payers are still waiting to see the benefits on the ground. The NFU Horticulture and Potatoes board submitted robust responses to both AHDB Horticulture and AHDB Potatoes and we’ve been in regular dialogue over the last few weeks to ensure that their words are turned into action in 2017. We have been given that reassurance, but will keeping it under close watch in the coming weeks and months.
2017 promises to be as challenging and interesting as the last twelve months, and not without its frustrations I’m sure. With the negotiations on Brexit due to formally commence, and the seasonal labour force rapidly losing critical mass the NFU Horticulture and Potatoes board will continue to work incredibly hard on your behalf to influence government and the supply chain to deliver a profitable horticulture and potatoes sector that can complete in a global market and give consumers the home grown products they demand.