Returns to English apple growers are currently “much lower” than previous seasons as retailers respond to downward pressure in the market and lower everyday prices on non-branded English dessert varieties.
A move by Sainsbury’s to re-locate its new £1 bags of Cox, Braeburn and Gala off the end plinths and into the main category has caused orders to drop off this week, with growers starting to feel the longer-term effects of lower prices.
Although English apple sales are up on this time last year (41,000 tonnes compared to 29,000t in 2013), insiders say growers face unprecedented competition from a swamped EU market dealing with the Russian ban. One retail supplier, who did not want to be named, even claimed growers were considering quitting non-premium apple production.
“To be honest returns are much lower than previous seasons, as a result of current market pressures,” said Alan Griffiths, head of UK procurement at OrchardWorld. Griffiths said growers who have invested in new orchard systems that produce between 55t and 60t per hectare will “just about” be able to cope with current returns, while smaller growers, who have not invested and still produce 25t to 30t per ha, are struggling.
Chief executive of English Apples & Pears, Adrian Barlow, said retailers are still paying a premium for English apples, and in percentage terms this is probably higher than previous years.
But Griffiths said: “I think things are beginning to change. The English premium era is pretty much over. In terms of lower prices on apples, it’s unlikely we will see any value coming back into it for a while.” He said the Sainsbury’s £1 deal is a sign that the apple market is changing: “Growers have now seen a drop in orders as Sainsbury’s has put [the £1 bags] in the normal place.”
Barlow stressed that the increase in apple sales is due to “terrific support” from most retailers. But he added: “Retailers are paying more than prices on the continent, but returns this season are not nearly as good as we’d like. At £1 a bag the returns to growers are unlikely to be sufficient to justify future investment.
'The result is we won’t see an increase in production, and if we don’t see an increase in production we won’t be able to continue to replace imports, and there is a big opportunity to replace imports as English dessert apples only count for 30 per cent of the market.”
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