Food prices could rise by about 5% by the autumn – and turkeys and pigs in blankets could be in short supply this Christmas – as shortages of delivery drivers, abattoir staff and other workers drive up pay and other costs.
Industry insiders say that pay for lorry drivers and other supply chain workers, including abbatoir workers, plus vegetable and fruit pickers and packers have all risen because of difficulties in finding sufficient staff.
“There is a war for workers,” said Ian Wright, chief executive of the Food and Drink Federation, which represents hundreds of firms across the food supply chain. “The only way to get more HGV and logistics drivers is to put up pay.”
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While that is good news for relatively low-paid workers, Wright said it would result in food prices rising around 5%. “In the second half of the year that is going to lead to increased prices for customers with food prices up by mid single digits,” he warned.
Tony Goodger, of the Association of Independent Meat Suppliers (Aims), said problems in the meat processing industry meant firms were paying at least 10% more for staff than before the pandemic. “Those costs have got be passed on,” he said.
Bureaucracy created by Brexit has also hit the sector, Goodger said, with particular shortages of vets for processing sites because of competing demand from exporters who now require a qualified vet to approve health certificates. Drivers with the correct accreditation to transport animals and abattoir workers with butchery skills are also hard to find.
The meat processing industry is estimated to be missing about a fifth of the necessary workers with some plants working with only half their normal staff at this time of year.
Those problems add to issues in the soft fruit industry, which needs at least 70,000 seasonal workers every summer, and has said it is about 5,000 pickers short this year. Food transport is also being affected by the shortage of tens of thousands of HGV drivers.
The driver shortage has also been linked to Brexit and tax changes which have affected pay while food industry employers say the furlough scheme has given workers a chance to retrain into jobs with more social hours.
Goodger said that meat processors were focusing workers on products needed immediately and that meant the processing of items such as pigs in blankets and stuffing, which were usually prepared over the summer and then frozen, were unlikely to be a priority.
“Those Christmas lines are unlikely to be being made so we will be likely not to have them when it comes to December,” he said. Goodger added that unless the government extended the seasonal workers scheme to butchers, EU workers who usually come to the UK from mid October to process turkeys for about two months, would not be able to do so.
Difficulties caused by Brexit, which has prevented seasonal and even long-term workers coming over from the EU, have combined with the effects of the pandemic to put a squeeze on the available workforce.
Just as in healthcare, hospitality and retail, food worker shortages have been exacerbated by people having to self-isolate after coming into contact with someone infected with the Covid virus or being pinged by the NHS test and trace app.
Changes to government restrictions, with lockdowns being imposed and then released at quite short notice, have also increased demand for products to be shifted quickly to meet changing demand.
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Government officials have held emergency talks with retailers, wholesalers and logistics groups to address the shortage of drivers and other workers. Retailers and suppliers have already warned of food and drink shortages but have largely been able to keep shelves stocked this summer by turning to alternative brands or reducing the number of options on sale to focus resources on producing and distributing best-selling items.
In the three months to 13 June, grocery prices fell 1.9% compared with the same period a year before, according to analysts at Kantar, as supermarkets competed to keep hold of shoppers returning to dining out and buying sandwiches on the go.
Retailers are also concerned about rising food waste as a result of difficulties with transport, with Tesco bosses warning that the vacancies were creating 48 tonnes of food waste each week, the equivalent of two truck loads.
