Suppliers struggling with rising costs yet locked into contracts in ‘weird supermarket culture’, says UK’s food tsar

UK government’s food tsar has blamed “weird supermarket culture” for recent food shortages, calling it a “market failure”.

Experts have criticised ministers for “leaving food policy to Tesco”, and meeting large food chains rather than suppliers, who have been struggling with rising costs while locked into contracts with supermarkets.

Henry Dimbleby, the co-founder of the restaurant chain Leon, who advises ministers on a food strategy for England, said Europe was not facing such issues because they did not have the same cultural problems.

“There’s just this weird supermarket culture. A weird competitive dynamic that’s emerged in the UK, and nowhere else in the world has it, and I don’t know why that is,” The Guardian quoted Dimbleby as saying.

Calling the current situation “frustrating”, Dimbleby further added that this is a problem of market failure in the specifically British food system.

“It’s going to get worse. The UK food system is, I think, unique – I don’t know another system where the supermarkets have these fixed-price contracts with suppliers. So, basically, you have no effective market. It’s a very difficult one for the government to solve, but it does need to be resolved,” Dimbleby said.

Dimbleby said that in the UK lettuce prices in supermarkets were kept stable, even when there was a glut, meaning farmers could not sell all their crop when they had too much, or get incentives to produce more during a shortage.

“If there’s bad weather across Europe, because there’s a scarcity supermarkets put their prices up – but not in the UK. And therefore at the margin, the suppliers will supply to France, Germany, Ukraine.”

Dimbleby believes the problem will get worse, and said he had foreseen this for some time, urging the government to “sort it out”.

“In 2004 there was a particularly bad frost and we had the same issue then. And it will continue to get worse due to climate change. These periods of freak events that used to be not very often, because of climate change are going to happen more and more often.

“These problems won’t be resolved until we look at what I outlined in my food strategy – we need to fix the problems of climate change, and health, and the way the food markets in the UK are structured leave us vulnerable to this, so we’d better sort it out,” he said.