A leading hospitality firm is warning that the new UK wage laws could make the British strawberry an “unaffordable luxury” and wipe out nearly 60% of growers’ profits in the coming year, reports UK newspaper The Guardian.
More than 140,000 servings of strawberries and cream are expected to be sold during this year’s Wimbledon fortnight – often heralded as the start of the British strawberry season – but hospitality consultants Beacon has warned that farms face a grim and financially unsustainable future after the new minimum wage was introduced in April.
Beacon, which represents about 2,000 independent businesses across the hospitality, leisure and care home markets as well as suppliers – including regional fresh produce businesses – said suppliers expect the price of strawberries to rise this year due to the pressure of the national living wage on UK farmers. Some are predicting the closure of British farms as strawberries become an unprofitable operation, replaced in supermarkets by cheaper imports.
The warning echoes a recent National Farmers’ Union (NFU) report which revealed that the impact of the new minimum pay threshold could cost growers 58% of their profits immediately while over the next four years it could cost fresh food businesses up to 158% of current business profit, making strawberry growing completely unprofitable for British farmers without extra government support.
It was a record-breaking year in 2015 for British strawberries, with sales topping £325m, comfortably beating the record of £275m in 2014. But Paul Connelly, managing director of Beacon, said: “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.”
Connelly said the company was “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”.
Other fresh produce farmers would be affected by national living wage, Beacon said, with labour-intensive farming industries likely to suffer the most. Farmers of salad essentials including lettuce, cucumber, peppers and cherry tomatoes are particularly at risk from the new pay threshold, combined with rising production costs and aggressive supermarket price wars.
Source: theguardian.com