Introduction: UK “did rather bring” food shortages on itself, Justin King says
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
Britain brought its shortages of fruit and vegetables upon itself, a former supermarket CEO has warned this morning.
Justin King, who ran Sainsbury’s for a decade, says the government’s failure to support the food industry with its soaring energy costs led to the restrictions on purchases of products such as tomatoes, pepper and cucumbers at major supermarkets.
King told Radio 4’s Today Programme that terrible weather in key sourcing locations [such as Spain and North Africa] have hit production, but to understand the problem we must “go further back”.
King points out:
This is a sector that’s been significantly disrupted by Brexit.
He also criticises the government for not providing energy support help to UK salad and vegetable growers.
Historically, salad veg has been grown 52 weeks of the year under glass in Britain, such as at Thanet Earth, the large agriculture and plant factory in Kent.
The government, though, chose not to support this sector from an energy point of view this winter.
This has had consequences, King says:
We are uniquely exposed to imports at this time of year.
There is a genuine shortage, but we did rather bring this problem on ourselves.
Yesterday, Tesco and Aldi joined Asda and Morrisons in rationing certain fresh produce lines.
Q: But isn’t this down to global pressures on fuel, the cost of fertiliser, energy costs for heating costs, rather than brexit?
This is a sector that is “very integrated across Europe”, King points out.
Waking to ex-Sainsbury’s supremo, Justin King, on #r4today saying: ‘This is a sector that has been significantly disrupted by Brexit…we brought this problem on ourselves’. Quite! pic.twitter.com/8yDVQjDQXW
— Bob Hudson (@Bob__Hudson) February 23, 2023
The UK could have chosen to subsidise the energy costs for this sector this winter, as it did for other industries. King points out that the National Farmers Union warned months ago that this problem was evident.
In December, the NFU did indeed warn that UK fruit and veg growers werer under massive pressure due to soaring energy costs and workforce shortages. It said then that “a lack of fairness for farmers and growers throughout the supply chain” could lead to more empty shelves.
NFU president Minette Batters urged the government to take food security seriously this week, at their annual conference.
Also coming up today
The UK government is now preparing to help more than 300 energy-intensive companies to cope with the extremely high cost of power.
Kemi Badenoch, the business secretary, is expected to announce new measures to support employers in sectors most exposed to high energy costs, such as steel, metals, paper and chemicals.
Dubbed the British Industry Supercharger, it could cut the disparity in the price that UK heavy industry pays for electricity compared to European rivals.
My colleague Alex Lawson explains:
Ministers have moved to level the playing field on energy costs between British manufacturers and their European competitors after years of concerns that domestic firms faced an unfair disadvantage.
The “British Industry Supercharger” scheme aims to improve conditions for 300 companies – employing 400,000 workers – in sectors including steel, metals, chemicals and paper manufacturing.
Financial markets are digesting minutes of the US Federal Reserve’s latest meeting, released last night.
They show that the vast majority of policymakers backed its decision to slow the pace of US interest rate rises to 0.25 percentage points.
The agenda
-
9.30am GMT: Bank of England policymaker Catherine Mann gives a speech on ‘The results of rising rates: Expectations, lags and the transmission of monetary policy’, to the Resolution Foundation
-
10am GMT: Eurozone inflation report for January
-
11am GMT: CBI Distributive Trades survey of UK retail
-
1.30pm GMT: US GDP report Q4 2022 (second estimate)
-
1.30pm GMT: US weekly jobless report
Key events
I urge folk to search out Justin King’s explanation on the root cause for #TomatoShortages. Effects of Brexit reduced our capacity to grow in winter & currently restaurants are buying supermarket stocks up – hence the rationing. The misinformation from the media is mind-blowing.
— Mark Vernon (@MVernon_21) February 23, 2023
Justin King also explains that supermarkets are now restricting sales of fruit and vegetables to prevent restaurants and even greengrocers snaffling their stocks.
These “fair purchase policies” have been deployed, he tells the Today programme, because “overall, the country is short” of supplies.
Most supermarkets have actually got very good supplies, King says, but wholesale markets are “bare at the moment”.
That means restaurants and high street greengrocers will start to buy off supermarket shelves if their own supplies are disrupted, retail veteran King explains:
What often happens is that, in the early hours of opening…. traders come in and grab armfuls and whisk them off to their businesses.
Introduction: UK “did rather bring” food shortages on itself, Justin King says
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
Britain brought its shortages of fruit and vegetables upon itself, a former supermarket CEO has warned this morning.
Justin King, who ran Sainsbury’s for a decade, says the government’s failure to support the food industry with its soaring energy costs led to the restrictions on purchases of products such as tomatoes, pepper and cucumbers at major supermarkets.
King told Radio 4’s Today Programme that terrible weather in key sourcing locations [such as Spain and North Africa] have hit production, but to understand the problem we must “go further back”.
King points out:
This is a sector that’s been significantly disrupted by Brexit.
He also criticises the government for not providing energy support help to UK salad and vegetable growers.
Historically, salad veg has been grown 52 weeks of the year under glass in Britain, such as at Thanet Earth, the large agriculture and plant factory in Kent.
The government, though, chose not to support this sector from an energy point of view this winter.
This has had consequences, King says:
We are uniquely exposed to imports at this time of year.
There is a genuine shortage, but we did rather bring this problem on ourselves.
Yesterday, Tesco and Aldi joined Asda and Morrisons in rationing certain fresh produce lines.
Q: But isn’t this down to global pressures on fuel, the cost of fertiliser, energy costs for heating costs, rather than brexit?
This is a sector that is “very integrated across Europe”, King points out.
Waking to ex-Sainsbury’s supremo, Justin King, on #r4today saying: ‘This is a sector that has been significantly disrupted by Brexit…we brought this problem on ourselves’. Quite! pic.twitter.com/8yDVQjDQXW
— Bob Hudson (@Bob__Hudson) February 23, 2023
The UK could have chosen to subsidise the energy costs for this sector this winter, as it did for other industries. King points out that the National Farmers Union warned months ago that this problem was evident.
In December, the NFU did indeed warn that UK fruit and veg growers werer under massive pressure due to soaring energy costs and workforce shortages. It said then that “a lack of fairness for farmers and growers throughout the supply chain” could lead to more empty shelves.
NFU president Minette Batters urged the government to take food security seriously this week, at their annual conference.
Also coming up today
The UK government is now preparing to help more than 300 energy-intensive companies to cope with the extremely high cost of power.
Kemi Badenoch, the business secretary, is expected to announce new measures to support employers in sectors most exposed to high energy costs, such as steel, metals, paper and chemicals.
Dubbed the British Industry Supercharger, it could cut the disparity in the price that UK heavy industry pays for electricity compared to European rivals.
My colleague Alex Lawson explains:
Ministers have moved to level the playing field on energy costs between British manufacturers and their European competitors after years of concerns that domestic firms faced an unfair disadvantage.
The “British Industry Supercharger” scheme aims to improve conditions for 300 companies – employing 400,000 workers – in sectors including steel, metals, chemicals and paper manufacturing.
Financial markets are digesting minutes of the US Federal Reserve’s latest meeting, released last night.
They show that the vast majority of policymakers backed its decision to slow the pace of US interest rate rises to 0.25 percentage points.
The agenda
-
9.30am GMT: Bank of England policymaker Catherine Mann gives a speech on ‘The results of rising rates: Expectations, lags and the transmission of monetary policy’, to the Resolution Foundation
-
10am GMT: Eurozone inflation report for January
-
11am GMT: CBI Distributive Trades survey of UK retail
-
1.30pm GMT: US GDP report Q4 2022 (second estimate)
-
1.30pm GMT: US weekly jobless report
