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The retail landscape of the UK has altered dramatically since the financial crisis of 2007-08.

With consumers in the grip of the austerity that followed, the established big four supermarkets were caught by surprise as the hard discounters began to move from the fringes and into the centre ground. The turmoil the likes of Aldi and Lidl were causing was underlined in 2012, when Tesco issued its first profit warning in nearly 20 years.

Since then the race to the bottom on price has been ever more aggressively engaged in by the likes of Tesco, Morrisons and Asda, and fresh produce remains among the key weapons being deployed in the battle.

As the big four continue to plot new ways of regaining some of the custom gobbled up by Aldi and Lidl, and with new pressures such as the introduction of the National Living Wage adding to other, more ingrained pressures that already squeeze fruit and veg firms, what effect is the price war going to have on fresh produce growers and suppliers over the course of 2016, and the next few years? And what could be done to try to reverse the trend?

One fresh produce supplier sums up how under pressure those producing the supermarkets’ fruit and veg feel. He says: “There needs to be far more respect shown to us; you can have conversations with the buyer until you’re blue in the face about returns, but if the policy from those above them is aimed at attacking other supermarkets, then what exactly can you do?”

One category in particular that has seen a notable sales decline in recent years is potatoes.

Andy Clarkson, commercial director at potato giant Greenvale, has concerns about the future effects the price war could have on the category: “Deep-cut promotions aren’t a strong platform for the potato industry to develop long-term sustainable growth, and have the potential to lead to everyone within the supply chain suffering,” he says. “If shoppers become accustomed to purchasing key potato varieties at long-term low prices, then it will become increasingly difficult to encourage a wider shopping repertoire within the category.”

Guy Poskitt, managing director of roots firm MH Poskitt, has other fears about what damage the price war will do to the industry in the years ahead. He tells FPJ: “Long-term, the price war has caused a lack of confidence and reduced investment, due to lack of cash. Profit isn’t a dirty word; if you’re not making a profit, you’ve not got the money to invest in new technology, to find ways of doing things better, to grow more for less.”

Rob Cullum, MD at Pacific Produce, meanwhile, worries that if price levels drop too low in combination with a fluctuating currency rate, the UK might suffer a paucity of certain crops.He adds: “If prices get too low, then often one of the first things to happen will be a decline in quality. This is inevitable. Sometimes it can be as simple as lower-grade produce, and other times it will be pack sizes declining or the size and weight of the vegetable. Personally I don’t want the quality to deteriorate – all the work being done to boost consumption can be undone by providing lower-quality, short shelf life or poor-tasting product, and if we don’t change the country of origin at the right time, we’ll end up with inferior product.

“Eventually supply and demand will take effect. If the UK pays consistently lower than the rest of the world then one by one growers will de-risk and send more fruit elsewhere. Or packers and importers will lose money as the grower price and the retail price will not match.In the end the market will take care of it, but some may get hurt along the way.”

Poskitt doesn’t believe an end to the price war is on the horizon: “I can’t see anything changing, even though this race to the bottom isn’t good for retailers, and it isn’t good for us,” he says. “Growers are becoming disillusioned with their jobs and have diversified into renewables and things like that. They’ve lost the zest for horticulture. This will happen more often if it remains unviable.”

As FPJ’s anonymous source noted, those at the sharp end are constantly telling their supermarket contacts of the pain the price war causes them.While supermarkets such as Aldi – which topped a supplier survey on supplier treatment conducted by the Groceries Code Adjudicator – pride themselves on the long-term contracts they lay in place with their growers, this isn’t the case across the board.

But provenance is ‘in’ right now. Well-attended street food markets and hipster cafés proudly boast about where they source their grub from; McDonald’s has spent heavily on an ad campaign aimed at demonstrating how humane and happy its suppliers are; and Tesco has launched a range of new brands involving fictional farms (see page 5), showing – in a somewhat unauthentic way – how much it believes consumers value links to food producers.

Therefore, if not now, then perhaps in future, the plight of growers caught up in the price war getting picked up and carried on a wave of momentum by the consumer press could prove to be damaging PR for the big supermarkets.

So, what are the solutions to the problem? Opinions, understandably, differ. FPJ’s source – a prominent fresh produce boss – has his theory: “Around 1.2 million people are employed by supermarkets, and the government collects these workers’ taxes, so it’s hard to see them legislating against that arrangement,” he explains. “But you do think it will need something like legislation to change what’s going on. We need MPs to pull their fingers out and look at what’s going on in our industry.”

Cullum, on the other hand, who notes that one positive of the price war has been the increased penetration of formerly niche products like mangoes and persimmon, suggests: “It would be great to have faster reactions in the UK to oversupply or crop flushes. If the retail position could be moved quicker then everyone can win. At present, promotions are sometimes planned so far in advance that they don’t match the best moment for the crop. This seems to be more important as global weather patterns are very unpredictable.”

Lee Stiles, secretary at the Lea Valley Growers’ Association, points to the example set on the confectionery shelves. He says: “Some growers believe that a solution to this may be found with a reduction in fruit sizes. For example, a 100g reduction to a 350g cucumber will not make much difference visually, but a slightly smaller fruit would allow growers to increase yields and potentially save food waste, with some claiming that a smaller fruit would be tastier. This could only work if the price stayed the same and all the retailers followed suit, much like the way that chocolate manufacturers have shrunk sizes over the years to keep the same price point.”

And Clarkson stresses the importance of looking beyond price to grow sales. He notes: “In recent times, cauliflowers and sweet potatoes have reinvented themselves as interesting and relevant not by price, but through clever marketing initiatives. There’s no reason why potatoes can’t do the same.”

Growers and suppliers need to see a change in the way the fresh produce weapons are deployed in the battle. Not just for the good of their businesses, but for the long-term health of commercial production of British fruit and veg.

By announcing plans to introduce a sugar tax, the UK government has shown a willingness to try to instigate a culture of change. Despite the fact that the threat of inadequate produce on the shelves, as alluded to by Cullum, would potentially reduce the amount of fresh fruit and veg Brits eat – in turn putting extra pressure on a health service already deemed as being too costly by the incumbent beancounters – it is unlikely the government will step in to try and ensure growers are getting better returns.

And thus, the primary stakeholders in the price war desperately need to reach some sort of agreement soon, before things go from bad to worse.