Agriculture News
Retailer asked how it can balance stable consumer prices with sustainable margins for producers
Tesco has come under fire from farmers and growers who claim guaranteeing stable prices to consumers is pushing volatility in the market back down the supply chain.
Speaking in a workshop session on ‘future-proofing your business for volatility’, at the NFU Conference this week, Tesco’s agriculture director Tom Hind said the retailer’s move to become closer to its suppliers through direct sourcing models has helped minimise volatility.
“We are working closer to our suppliers in order to manage volatility. We believe there are other opportunities in producer contracts and increasingly we’ve been able to extend relationships at farm level. Secondly we are asking, how can the retailer help to manage risk by forward buying?” he said.
But Hind came under pressure from the floor, after one questioner asked how Tesco can balance stable prices for both consumers and producers.
“You have hinted that Tesco wants to offer stable prices to customers – now what that means is you want to push volatility back down the supply chain,” one farmer asked.
“Can Tesco give its customers stable prices and its producers stable margins? You talk the talk but we need to see evidence that you can support us, because your profits always look better than mine,” he continued.
Hind replied: “You’re losing sight of the bigger issues here, which are consumption and competition. We need to focus on quality, and ensuring the product remains relatively affordable faced with the competition.”
He added that Tesco has worked with key top fruit suppliers to help them maximise packing facilities outside of the British season, using fruit from overseas.
Elsewhere in the session, HSBC’s agriculture manager, Allan Wilkinson, warned that businesses’ should look to internal management skills in order to ride out difficult market conditions.
“Management improvement and cutting costs of operation are the most important aspects, and will enable you to thrive once the prices go back up,” he said.
“What we know about volatility is that prices will go back up, we just don’t know when. One year’s loss doesn’t make a bad business,” he continued.
Another panelist stressed that management skills are crucial to helping a business through difficult times.
Managing director of arable farming group Brixworth Farming, Charles Matts, said: “To me, it’s really important that any farm manager has good management skills that extend beyond their technical ability.”
The Soil Association has claimed its Organic September campaign caused a ‘boom’ in the organics market, causing growth of 3.6% during the month.
Nielsen figures showed that sales of organic products in September exceeded £100 million, and the Soil Association said this was down to its campaign, “proving small changes can add up to a big difference”.
Organic September encouraged consumers to change their shopping habits for the month by putting organic food and drink in their trolleys. The campaign involved local independent retailers and online and national UK supermarkets, and reached over six million people through social media, according to the Soil Association.
Finn Cottle, trade consultant at the Soil Association, said; “This is a clear sign informed UK shoppers are becoming more loyal to organic food and drink. Campaigns like Organic September, alongside recent positive publicity and a renewed emphasis on innovation and new listings, are all helping to bolster performance. The organic sector has been performing exceptionally well since the release of Newcastle University’s research on the benefits of organic, and in fact this growth has taken place against the backdrop of a deflated non-organic sector. New products and wider accessibility to organic will continue to help secure growth in this market.”
The organics group said new figures suggested continued growth for the sector. The 52 weeks to 11 October 2014 showed growth of 1.6%, compared to the same period last year. It added that organic poultry had been one of the best performers, with growth of 6.6%. The independent retail sector saw organic sales grow by 6.9%.
Mike Kilcourse, commercial director at wholesaler Tree of Life, said: “Interest in organic foods has been particularly strong recently. Sentiment among our retail customers is positive. Recent growth in sales of organic products will have been helped by marketing and promotional activities right the way through the supply chain. Campaigns such as the Soil Association’s Organic September month-long promotion, which we were glad to support this year, go a long way to help raise awareness.”
Russia’s ban on produce from EU, US, Canada, Norway and Australia leads to last-minute flurry of interest from unaffected countries.
With less than a month to go until the start of World Food Moscow, which takes place in the Russian capital on 15-18 September, speculation has been rife as to the possible impact on the fair of Russia’s ban on agricultural products from the EU, the US, Canada, Australia and Norway
Several exhibitors from EU countries suggested that they might have chosen to attend merely as visitors this year, had they not already booked flights, hotels and exhibition space.
However, national group stands for those countries not affected by the ban, including Egypt, China, Brazil and Argentina have substantially increased their exhibiting space, according to the exhibition’s organisers, ITE Group.
Tony Higginson, ITE’s sales director, commented: “The changes in Russia’s food regulations have meant that interest from non-EU countries entering this market has increased, and subsequently we have received an influx of last-minute bookings from those countries that are not affected by the ban.”
He added that the ban had had little impact on the event’s overall exhibitor list, pointing to the fact that international companies, including those from the EU, were keen to maintain their presence on the market and to continue to develop their relationships with existing clients.
Twenty-seven fatal injuries to agri-workers in the industry in 2013/14, lower than the average of 33 for the past five years
The number of agricultural employees that have died at work in Great Britain over the last year has been recorded at its lowest rate for half a decade.
There were 27 fatal injuries to workers in the industry between April 2013 and March 2014, lower than the average of 33 for the previous five years.
Provisional data released by the Health and Safety Executive (HSE) this week also revealed compared with 150 in the previous year, 133 workers were fatally injured in the most recent period the data covers – the lowest annual rate on record.
The overall rate of fatal injury has dropped to 0.44 per 100,000 workers, compared to 0.51 in 2012/13.
Judith Hackitt, HSE chair, said: “The release of the annual statistics always leads to mixed emotions. Sadness for the loss of 133 lives, and sympathy for their families, friends and workmates, but also a sense of encouragement that we continue to make progress in reducing the toll of suffering.
“Whilst these are only provisional figures, they confirm Britain’s performance in health and safety as world class. For the last eight years we have consistently recorded one of the lowest rates of fatal injuries to workers among the leading industrial nations in Europe.”
The government’s health and safety minister Mike Penning, said: “Any death at work is a death too many. But these statistics show that workplaces are getting safer.
“The Health and Safety Executive do an excellent job in making sure each and every one of us can go out to do an honest day’s work in the knowledge that our safety is being taken seriously.”
There were four fatal injuries to workers in waste and recycling between April 2013 and March 2014, lower than the average count of seven over the last five years.
In all, 106 fatal injuries in England were recorded – a rate of 0.41 deaths per 100,000 workers, compared to an average of 134 deaths in the past five years and a decrease from the 119 deaths (and rate of 0.47) recorded in 2012/13.
There were 20 fatal injuries in Scotland were recorded, a rate of 0.78 deaths per 100,000 workers, compared to an average of 21 deaths in the past five years and a decrease from the 23 deaths (and rate of 0.90) recorded in 2012/13, and seven in Wales – a rate of 0.52 deaths per 100,000 workers, compared to an average of 10 deaths in the past five years and a decrease from the 8 deaths (and rate of 0.61) recorded in 2012/13.