What’s behind the latest food shortages?

The food sector continues to face staffing shortages of lorry drivers, food manufacturing workers, farm staff and other key workers as the perfect storm of Brexit and Covid-19 cause disruption and supply issues across the industry.

Retailers, producers and restaurants are all being hit by worker shortages, which are the result of Covid-related staff absences as well as European Union workers leaving the country due to Brexit. While these effects threaten businesses both large and small, local shops with smaller supply chains may be in a stronger position to keep their shelves stocked.

Logistics UK and the British Retail Consortium (BRC) wrote to the Department for Business, Energy and Industrial Strategy (BEIS) to outline steps that the Government needs to take to address shortages of HGV drivers, which are causing significant disruption to the food and drink supply chain.

According to the groups, the crisis of driver shortages is expected to worsen in the coming months as demand for goods increases in the run-up to Christmas. Tesco chairman John Allan has warned that the disruption could lead to gaps on supermarket shelves over Christmas.

“The current shortfall of around 90,000 HGV drivers is placing unsustainable pressure on retailers and their supply chains,” wrote David Wells, CEO of Logistics UK, and Helen Dickinson, CEO of the BRC. “While there was a shortage of HGV drivers prior to the Covid-19 pandemic and Brexit, these two events have exacerbated the situation; the pandemic halted driver training and testing for more than 12 months, while an estimated 25,000 EU drivers returned home during the pandemic and following the end of the transition period.”

The two groups called for the Government to increase testing capacity to get through the backlog of driver tests, review its decision not to grant temporary work visas to HGV drivers from the EU and ensure its skills and training schemes support the recruitment of HGV drivers.

Food price hikes possible

The Road Haulage Association, meanwhile, has said the pay rises offered by firms in order to attract more drivers could force supermarkets to pass costs on to consumers. “Certainly drivers’ pay is increasing, often by quite substantial amounts,” said managing director of policy and public affairs Rod McKenzie.

“This in turn is a cost that will need to be passed on, and given the tight profit margins of most haulage operators that means their rates to customers will have to go up. In turn, this may mean more of us paying higher prices for goods, services and shopping – including food prices – going forward.”

Shortages hit Christmas turkeys

Food manufacturers are also feeling the impact of staff shortages. The Association of Independent Meat Suppliers is in talks with the Ministry of Justice to explore how its members could recruit more prisoners and ex-offenders to fill vacancies.

“Much of the food industry is facing a recruitment crisis,” said Tony Goodger of the Association of Independent Meat Suppliers. “The advice we have received from the Home Office is that the UK’s domestic labour force should take priority. However hard we and many of the members have tried, staffing remains a challenge.”

Similarly, the British Poultry Council has warned that one in six jobs were unfilled as a result of EU workers returning home. The group estimates that Christmas turkey production will be cut down by 20% due to staffing shortages. Nick Allen, CEO of The British Meat Processors’ Association, said the shortage of skills and workers for permanent positions “is reaching a critically high level” with some plants having between 10% and 16% vacancies even before absenteeism due to Covid is factored in.

Hospitality closures

Foodservice operators are also being impacted by staff shortages, with a recent survey revealing that almost two-thirds (63%) of hospitality businesses leaders said it was an issue post-Brexit. 

Huge chains such as KFC, Nando’s and McDonald’s have been forced to close branches or reduce menus as a result of a shortage of some supplies, and The Independent reports that these issues will likely trickle down to independent restaurants too.

While independent retailers were largely spared by the shortages caused by panic buying at the start of the pandemic, these industry-wide supply chain issues and staffing shortages pose a bigger threat as the food sector approaches the busy Christmas season. By keeping supply chains small and partnering with local producers, however, fine food retailers may once again come out on top.

Are staff shortages or supply chain issues impacting your business? Get in touch with courtney.goldsmith@aceville.co.uk

This article was originally published on 24th August 2021.