The UK risks offshoring food production into Europe unless immigration rules are changed and access to labour improved, industry has warned.
Andrew Opie, director of food and sustainability at the British Retail Consortium (BRC), said vacancy rates of 10-13% in food production and distribution and a lack of access to seasonal EU workers meant the government faced a “stark choice”.
“We cannot recruit enough indigenous people. They just don’t want to do those [food manufacturing and processing] roles for whatever reason,” he said.
“I think it leaves the government with a choice in some ways. Does it want to maintain the level of food manufacturing as it stands in this country or does it risk offshoring that production to other countries and then we import those finished goods into the UK?
“We have a highly-skilled, well-run food manufacturing sector in this country which exports quite widely but it’s under such strain at the moment and if we cannot recruit people then retailers who need to buy those products for consumers will need to look elsewhere and will end up offshoring some of that production into places like Europe.”
Opie was speaking during an extraordinary session of the UK Trade & Business Commission, an independent group of business representatives and MPs, examining driver shortages and effects on supply chains.
Opie said the BRC was not seeing or anticipating major product shortages “but it’s a constant challenge which we have never known before where the supply chain is always just trying to keep its head above water”.
“We are seeing price pressures building in the supply chain and it’s just how long retailers can hold that back from consumers.”
Richard Harrow, chief executive of the British Frozen Food Federation, said members had reported the cost of shipping a container from China had increased from $1,500 to $10,000-$12,000, while transport costs overall had risen by 5-10%. He said driver shortages were compounded by shortages of engineers on production lines.
“Unless we get some short-term flexibility from government around short-term visas, access to drivers or areas of production, I think we’re in for a rocky time,” he said.
Alex Veitch, general manager – public policy at Logistics UK, predicted the HGV driver shortage would last until at least spring 2022, when the backlog of pandemic-delayed driver tests is expected to be cleared.
He said Logistics UK had asked the government for 10,000 short-term visas to address the shortage now, while driver salaries were rising. “The cost of transport will go up,” he said.
The session was told Brexit border checks due to come into effect in October and January were likely to add to supply chain problems.
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