‘We have to get used to paying more for food’

A Peterborough-based supplier of fresh vegetables has warned that shoppers will have to get used to paying more for their food as shortages occur more often.

The warning comes from William Burgess, chairman of Produce World, in Yaxley, who says that low profit margins earned by food producers were the principal cause for the current shortages of tomatoes, peppers and cucumbers in some leading supermarkets.

And he says that in the near future customers are likely to see other shortages of root crops, such as carrots.

He said: “While the poor weather in Spain and Morocco is a factor in the current shortages, the main reason is cost – the prices paid to the grower are insufficient given the inflation in the costs of growing the produce.”

He said that inflation in the agricultural sector, driven by rising energy costs and increasing labour costs, had been running at 30 per cent while profit margins for producers are just two or three per cent.

Mr Burgess said: “Retailers in the UK have been very good at dialling prices down and fresh food here is the cheapest in the world.

“I think we are seeing a market adjustment because, when the margins are rock bottom for producers, there is nowhere to go but to increase prices.

He added: “There is a lot less UK production now because growers have cut back because they can’t get the price they need.

“This is the real challenge to the retail sector.

“In the end, if you don't pay a sustainable price, then you get empty shelves.”

Good relationships with overseas growers are seen as the recipe for success at organic vegetables delivery farm Riverford, in Sacrewell, which is enjoying a plentiful supply of salad. Director Luke King said: “We are still getting a supply of tomatoes and peppers from our organic growers in Spain.

“We have developed longterm relationships with the two main organic growers in Spain, and we work with these companies almost exclusively, so we aren’t competing with lots of other companies.

“It means we are prioritised and have a better level of supply than UK supermarkets, in most cases.”

William Burgess, chairman of Produce World