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April 6, 2022

UK government chastised for response to food sector labour shortages

MPs have warned the sector faces “permanent damage” if the problem is not tackled.

By Andy Coyne

An influential Parliamentary committee has criticised the UK government for failing to get to grips with labour shortages in the country’s food and farming industries.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

The House of Commons cross-party Environment, Food and Rural Affairs Committee has warned the sectors face “permanent damage” if the Government fails to address the issue.

Without fundamental change, the UK is facing a “chain reaction” of wage rises, leading to price increases and to food production being exported abroad, the committee said.

In its report issued today (6 April), the committee, said: “There can be no doubt about the seriousness of the issues facing the food and farming sector caused by labour shortages.”

It said the paucity of labour in 2021 – “due mainly to Covid-19 and Brexit” – took a toll on food security, the welfare of animals and the mental health of those who work in the industry.

The pig sector was particularly badly affected, the committee’s report said, with 35,000 pigs being culled due to a lack of butchers to process them. The report called on the government to provide direct support to pig farmers.

The committee said it was “frustrated by the reluctance of government to engage with the industry over labour shortages”.

Despite “valiant attempts” by the industry, it said ministers “failed to understand the issues and even sought to pass the blame onto the sector”.

The report suggested revised immigration measures could address the current crisis. It called for a review of the Skilled Workers Visa scheme.

“While there have been welcome changes to the Seasonal Worker Pilot, the inclusion of the ornamental sector necessitates the Government to make available the extra 10,000 visas earmarked and for the scheme to be made permanent,” it said.

“However, a reliance on overseas labour must be reduced in preference for a long-term labour strategy that grows and develops home-grown talent, combining attractive education and vocational training packages with the deployment of new technology.”

The chair of the committee, Neil Parish MP, said: “In 2021 farmers faced an extraordinary situation – crops were left to rot in the fields and healthy pigs were culled due to a lack of workers. This has serious implications for the well-being of the people who put food on our tables today and in the future. The government’s attitude to the plight of food and farming workers was particularly disappointing.

“While some of the reforms put forward by Government have helped in the short term, and we agreed that we must look to expand the domestic workforce – this won’t happen overnight. In the meantime, it must use the powers available – including over immigration policy – to support the sector. Otherwise, we will export our food production and import more of our food.

“Even more importantly, Government must change its attitude to the food and farming sector – trusting them and acting promptly when they raise concerns. Our food and farmers depend on it.”

Commenting on the report, Jayne Almond, director of policy and corporate affairs at industry body the Food and Drink Federation (FDF), said: “Compounding the inflationary pressures on UK food and drink manufacturers, many businesses continue to struggle with systemic labour shortages. We are pleased the committee agreed with the FDF that accurate government data on the state of our industry’s workforce is essential to devise the right solutions and make full use of the Shortage Occupation List.

“One such solution is for a long-term strategy on labour and technology that helps us to attract, retrain and upskill our workforce and which supports smaller businesses to invest. The FDF will continue our work with government, skills providers and across the supply chain to attract the new talent we need and ensure people can build fulfilling careers in food and drink, no matter where they are in the UK.”

Responding to the report, a UK government spokesperson said: “We fully acknowledge that the food and farming industry is facing labour challenges and we continue to work with the sector to mitigate them. This includes Defra [Department for Environment, Food & Rural Affairs]’s upcoming response to the automation review – the first step in understanding how the Government can support the uptake of automation technologies and reduce horticulture’s reliance on seasonal migrant labour.

“We have given the industry greater certainty by enabling the seasonal workers scheme until the end of 2024, allowing overseas workers to come to the UK for up to six months to work in the horticulture sector. Our new points-based immigration system also expanded the skilled worker route to many more occupations, including butchers, who can now be recruited from anywhere in the world.”

Labour pains felt in US

Meanwhile, labour shortages are also biting on the other side of the Atlantic.

Responding to the latest jobs report from the US Bureau of Labour statistics, which showed slowed growth across the consumer packaged goods (CPG) industry, the Consumer Brands Association suggested “little progress” had been made to tackle the industry’s 112,000 job openings.

The association’s president and CEO Geoff Freeman, said: “Today’s report slows the trend of what we had hoped would be steady gains for the CPG industry. Mediocre job growth and tremendous uncertainty in the world keep the supply chain at a perpetual breaking point.

“Unfortunately, that means consumers have seen the consequences in spotty shortages when they shop for essentials. A robust labour force is our best strategy to guard against supply chain challenges.

“In addition to needing to see consistent positive momentum in jobs reports, we must also solve the root causes of the industry’s labour shortage. The industry is adding jobs but also needs a larger workforce to manage consumer demand which just exceeded March 2020’s panic-buying highs for the seventh straight month.

“With the unemployment rate creeping even lower this month, we have to ask what is keeping workers on the sidelines, how many of them may return to the labour force and what it will take to get them there – then determine policies that unlock their potential.”

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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