Food supply chain round-up: Recommendations on food workers, Ukraine grain deal and CPTPP updates

Thu 13 Jul 2023
Posted by: Phillip Adnett
Trade News

Worker in factory handling packaged meat on conveyer chain

The IOE&IT Daily Update rounds-up the latest news from the food and drink sector, including the troubled Black Sea Grain Initiative, a call to ease visa restrictions to aid food producers and supermarket’s reactions to the ongoing cost-of-living crisis.

‘Relax labour restrictions’ says meat association

UK trade association, the British Meat Producers Association (BMPA), has backed an independent review that called for the government to allow in more migrant workers to alleviate labour shortages.

The BMPA says the cost of finding staff is contributing to UK inflation and its members face challenges in attracting domestic employees.

DEFRA, which ordered the review into supply chain shortages in the food sector, says it is considering the report and will respond fully in the autumn.

As well as calling for improved access to overseas workers, the review has recommended making agriculture more appealing to domestic workers and offering better apprenticeships and training.

Farming minister Mark Spencer added that it had confirmed that 45,000 seasonal worker visas would again be available to the horticulture sector for 2024, with an additional 10,000 more if required, reports Farmers Weekly.

Food inflation

As core inflation continues to remain an issue, supermarkets have denied ‘profiteering’ allegations levelled at them and have predicted a fall in food prices over the next few months.

Announcing a 9.8% rise in quarterly sales, Sainsbury’s claimed prices for both fresh and packaged foods would fall over the next few months.

Food and drink inflation was 18.3% in May and 14.6% in June, according to the most recent industry data.

Recently, the UK’s Competitions and Markets Authority (CMA) found that Sainsbury’s and Asda both had “unlawful anti-competitive land agreements” that prevented rival stores from opening nearby.

David Stewart, executive director of the agency, said the CMA had secured agreements from both businesses to stop this behaviour and that it was “part of our wider action to tackle the cost of living.”

Black sea initiative

Doubts remain about whether the deal to allow grain exports through Black Sea ports will be renewed, as Russia continues to hold out for concessions.

Moscow claims that the deal, brokered by the UN and Turkey last year, has not benefitted poor countries, something that the European Commission rejected.

Russia has also claimed that it faces hurdles in exporting its own grain and fertilisers, despite figures showing it has moved record amounts, reports AP News.

The agreement, known formally as the Black Sea Grain Initiative, has been extended four times, with Moscow repeatedly dragging its feet before extending a deal which has seen more than 30m tons of food shipped.

CPTPP and food standards

Food industry bodies have called for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to be modified in order to prevent cheap battery farm eggs entering the UK market, according to the Food Manufacture.

Battery farm eggs have been banned in the UK since 2012, but British Egg Industry Council CEO, Mark Williams, said the deal, which phases out tariffs on eggs over 10 years, would undermine the UK sector.

Campaigners are calling for the government to disallow eggs not produced to UK animal welfare standards, reports the Guardian.

Concern among animal welfare campaigners have also been raised about the possibility of low-welfare pork being imported from CPTPP members such as Canada which uses practices banned in the UK.

Food focuses globally

Businesses have been urged to build on the export success of red meat and dairy as the global market grows.

Speaking at the Agriculture and Horticulture Development Board (AHDB) Export Conference last month, AHDB chair Nicholas Saphir welcomed government’s commitment to invest £2m to boost its programme of global trade shows and missions, on top of £1.6m for the GREAT food and drink campaign and a new £1m export support fund for dairy.

The AHDB also launched ‘Beyond Borders’, a strategy to encourage more businesses to develop their export potential.

Speaking to The Grocer, Saphir emphasised the importance of retaining a focus on the EU market and said it was “important to maintain the pressure on trade with Europe because we can’t just walk away from it”.

The EU remains the UK’s largest food and drink exports market, holding 58.6% of the share as of Q1 2023.

FDF figures published in February showed that UK exports to the EU rose by 22% to £13.7bn in 2022.