Food shortage threat remains as labour issues bite

Industry groups across the food supply chain have warned that labour shortages, including among lorry drivers and growers, will threaten food supplies as lockdown comes to an end. Although fine food retailers are preparing for a spike in sales this summer, thanks to staycations and a growing focus on local shopping, the problems in the supply chain could impact independents as well as multiples.

Following emergency talks with retailers, wholesalers and logistics companies, Grant Shapps, secretary for state for transport, announced that HGV drivers’ hours would be extended temporarily, “giving flexibility to drivers and operators to make slightly longer journeys,” he said on Twitter. “We’ve ramped up the number of driving tests available and will consider other measures.”

The Federation of Wholesale Distributors (FWD) said the extension would ensure that shops, restaurants and pubs would get all the stock they needed on 19th July when the final lockdown measures are removed, avoiding a “catastrophic supply chain failure”.

“The flexibility in drivers’ hours means those out-of-the-way shops, pubs and restaurants will get the stock they need for the big reopening on Freedom Day, and will allow wholesalers to do as much as 15% more deliveries each day,” said James Bielby, chief executive of the FWD. “Provided it remains in place into the autumn, it will avert possible school closures in September and shortages in the shops in the run up to Christmas.”

Worker shortage could raise food prices

Despite this, industry groups have warned that food prices could rise by around 5% by the autumn, and shortages of turkeys could be seen this Christmas, due to a lack of delivery drivers as well as abattoir staff and other workers, according to a report in The Guardian.

“There is a war for workers,” Ian Wright, chief executive of the Food and Drink Federation, said. “The only way to get more HGV and logistics drivers is to put up pay. 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 said.

According to the British Growers Association, farmers are also experiencing a lack of workers due to new immigration rules and quarantine regulations affecting the willingness of workers to return to the UK. The group said labour costs have risen by as much as 15% already as growers try to attract staff and compete with other industries, and haulage prices have risen by 10%. “Unless there is a serious shift in the valuation of food, we are at risk of crops being left in the ground and supermarket shelves left empty,” British Growers’ CEO Jack Ward said.

Longer-term solutions needed

When it comes to the HGV driver skills shortage, Logistics UK says extending drivers’ hours is not the answer. “The logistics sector has been experiencing a significant shortage of drivers for a number of years, but this situation has been exacerbated by factors including the Covid-19 pandemic and Brexit, which has seen many EU workers return to their home countries,” said James Firth, head of road freight regulation policy at Logistics UK.

“The industry needs a longer-term solution to the recruitment of drivers – including temporary visas for EU workers to cover the gaps while new recruits can be trained, and interest free loans for those wishing to enter the market – not a stop-gap measure that will heap more pressure on existing workers,” he continued. The BBC has reported that the government is exploring the idea of creating a short-term visa scheme for lorry drivers, although the Home Office denies it has any plans to introduce the visas.

Independent retailers with shorter supply chains are likely to be in the strongest position during this period of worker shortages, but even they could be impacted by a lack of growers and delivery drivers this year.