Droughts across the UK and Europe are killing crops and endangering the viability of next year’s produce, leading to higher food and wine prices.
Lower yields are combining higher costs for packaging and energy to threaten a 10% rise in the price of bottle of wine, according David Gates, chief executive of Direct Wines, which owns Laithwaites.
Mr Gates said wine retailers were “being bombarded from every direction with inflationary pressure; staff salaries, energy, delivery costs, raw materials and recycling costs”.
Gates told the Daily Telegraph: “Hot weather and low rain tends to lead to lower yields which leads to increased prices. On top of that costs of all the dry goods, so items such as bottles and cardboard, are significantly up due to supply chain and energy cost issues.”
The UK is already facing record inflation on food prices due to soaring energy costs. According to the Office for National Statistics, food inflation hit 9.5% in June, with warnings from supply chain analysts IGD that food inflation could hit 15%.
Jack Ward, CEO of the British Growers Association, which represents the British horticulture industry, said: “Brassica growers have already been reporting plans to cut back production by as much as 20%, and this coupled with the anticipated losses due to the ongoing drought could leave UK veg supplies in a deficit situation as we move into the autumn and winter. Possible restrictions on water usage could make an already difficult situation even worse.”
He said “weather volatility” is posing an increasing threat to the UK’s supply chains.
“In recent years vegetable production has had to contend with drought, record rainfall, record amounts of frost and this year temperatures which significantly affect crops growing in the ground. The production dips we are anticipating will make supplies of veg tight as we move into late autumn and winter.”
According to the Guardian, half of the UK's potato crop is expected to fail this year, while losses of 10-50% are expected for food items including carrots, onions, apples and hops.
The droughts have already caused issues across supply chains, with low water levels on the Rhine – a vital shipping route across Germany and the Netherlands – impacting freight.
Nick Allen, CEO of the British Meat Processors Association, told SM the drought was compounding tough operating conditions caused by soaring energy costs and labour shortages. He said the UK food industry is consequently “heading towards one of the most challenging autumn and winter periods the industry has seen for a long time”.
He added: “The biggest concern is that we are starting to see farmers being forced to eat into stocks of feed reserved for the winter. This on the back of a difficult spring and the fact that fertiliser prices virtually doubled after the start of the Ukraine crisis, which meant that they would have lower stocks in the first place. It has created a really worrying scenario.”
The Wine and Spirit Trade Association told SM “it’s too early” to know the full impact of droughts on wine supplies as vines and grapes tend to be more resilient to drought. It said champagne harvests were predicted to be above the five-year average, while in other areas of France the estimates are lower due to hail and frosts seen earlier in the year.
Meanwhile, a survey by the National Farmers Union (NFU) of 199 growers across England and Wales found £22m worth of fruit and vegetables have gone to waste in the first half of 2022 due to worker shortages.
The survey also found 40% of respondents were suffering crop losses as a result of labour shortages and 56% reported a fall in production.
NFU deputy president Tom Bradshaw said: “It’s nothing short of a travesty that quality, nutritious food is being wasted at a time when families across the country are already struggling to make ends meet because of soaring living costs.
“At the same time, the prolonged dry weather and record temperatures have created a really challenging growing environment for our fruit and veg. Every crop is valuable – to the farm business and to the people whose plates they fill. We simply can’t afford to be leaving food unpicked.”
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