2 Sisters Food Group, one of Britain’s biggest food producers, has warned of empty shelves and panic buying if critical issues threatening UK food supply are not addressed immediately.
Ranjit Singh Boparan, founder and president at 2 Sisters, said the current challenges facing the sector are like no other he has seen in his 27 years as a food entrepreneur.
“I have seen lots of change over the years – but nothing compares to now. The use of the term ‘perfect storm’ has become a cliché, but never has that been a truer phase to use. No-one could possibly have predicted that this toxic cocktail would come together at this time,” he said.
While the issues started with the pandemic, Boparan noted that the operating environment has deteriorated ‘so profoundly’ since May this year, which could lead to major food shortages.
“Supply of chicken and turkey is under threat. Our retail partners and the wider supply chain have worked together closer than ever before to ensure we retain food supply and this is of huge credit to everyone. But we are at crisis point,” he added.
Last week, the British Meat Processors’ Association (BMPA) has warned that the country’s food supply chains are “right on the edge of failing” as absence related to Covid-19 has aggravated a critical shortage of labour. The meat industry body said the shortage of skills was so critical, some plants had reported vacancies of 10 per cent to 16 per cent of permanent positions, discounting the impact of the pandemic.
“On top of the underlying worker shortage, we’re also hearing from some members that between 5 per cent and 10 per cent of their workforce have been ‘pinged’ by the (health service) app and asked to self-isolate,” BMPA chief executive Nick Allen said.
Boparan concurred and sought urgent action and more support from the government.
“We are operating in a framework that’s complete madness and the government needs calling out for sticking their heads in the sand. ‘Pingdemic’ is not the issue for us. There’s fundamental structural changes going on here that need sorting,” he said.
“The government needs to act immediately if it wants to avoid the most serious food shortages that this country has seen in over 75 years. Not acting would be irresponsible.”
2 Sisters said it has seen, on average, 15 per cent labour shortages for its 16,000 workforce this year as Brexit has acutely reduced available workers across the food sector. In addition, the company is also experiencing unprecedented wage inflation across its supply chain in skilled roles. Ingredient inflation is another factor that caused major hit to the business, along with the heavy investment to keep colleagues safe in the backdrop of Covid-19 and the new complex regime for import and export post Brexit.
“These are unique, era-defining challenges which we started to tackle head on last year. But they’ve all come to a head in the past 12 weeks. Clearly these have brought continued and intensive pressure on our business, just like they have elsewhere,” Boparan said.
“This cannot be sustained indefinitely. The critical labour issue alone means we walk a tightrope every week at the moment. We’re just about coping, but I can see if no support is forthcoming – and urgently – from the government, then shelves will be empty, food waste will rocket simply because it cannot be processed, or delivered, and the shortages we saw last year will be peanuts in comparison to what could come.”
Boparan has called on the Government to act now to support the sector given its unprecedented challenges.
He added: “Entry level – that’s broadly unskilled – roles (requiring a Level 2 qualification) are where the sector is facing greatest difficulty. Poultry workers should be exempt from this and the government needs to think again on the entry thresholds for salaries and skills.
“What needs to happen is an entry route should be plotted so workers face minimal administrative hurdles to get through to support businesses like ours.
“We also need recognition from the entire supply chain – that’s our suppliers, customers and ultimately the end consumer – that without the correct level of support, we are potentially facing a food crisis in the UK like we’ve never seen before.”
Meanwhile, 2 Sisters has announced a £7.5m investment in new technology and upgrades at the group’s UK Poultry site in Sandycroft, creating more than 200 new jobs.
The site, based on Sandycroft Industrial Estate, processes one million birds per week and is one of the biggest sites within 2 Sisters employing more than 1300 colleagues. The investment has enabled the installation of new technology including automated packing lines, new packaging machines, upgrading of cutting lines to increase capacity and the introduction of X-ray bone detection machinery for fillet production.