Supermarket price cuts cause growers concern

Growers have reacted with dismay after Morrisons announced massive price cuts for shoppers including up to a third off fresh produce.

Image: HW
Image: HW

The fears were prompted after the supermarket chain launched what it called one of its "biggest price crunches", which it said was prompted by worries following the Brexit vote. An average of 18 per cent has been lopped off the price of 1,045 products including fruit and vegetables.

Morrisons is British farming's biggest supermarket customer. The price cuts include an average 17 per cent off fruit, vegetables and salad as well as 16 per cent off frozen food. Birds Eye 400g garden peas dropped by a third, from £1.50 to £1, while a 225g pack of blackberries went from £2.36 to £1.64 and 350g of organic broccoli falls from £1.42 to £1.21.

British Growers Association chief executive Jack Ward said: "This will make a difficult situation even more difficult for growers. Most producers are operating on wafer-thin margins of only one or two per cent and are already having to contend with a seven per cent increase in the national minimum wage.

"It begs the question of how can anybody make the equation stack up and if it doesn't make money growers will stop producing. It will push production out of the UK, which seems to run counter to what consumers are wanting, which is more UK produce, not more imports. It also comes at a time when everything is going to get a lot more expensive buying abroad because of the exchange rate."

NFU chief horticulture adviser Chris Hartfield said: "Any lowering of price in what is already a hugely competitive, tight marketplace is clearly a big concern for growers. We need to make sure the share of the margin returned to the grower is fair and sustainable in giving them the profit to reinvest in growing their businesses.

"I think Morrisons' drive is just another aspect of the ongoing price onslaught and race to the bottom by the major retailers. I don't see why the referendum result should provoke this reaction from a particular retailer, but different retailers have different strategies for different reasons."

A grower who asked not to be named said: "People are living in fantasy land. I don't think they understand - whether it's clothes or food - just what it takes to churn out this stuff. It's great if you are a consumer, but if you look behind the scenes it's not so good for those growing produce."

But Morrisons customer and marketing director Andy Atkinson said: "We are constantly listening to our customers and know they are concerned about whether food prices will go up following the Brexit vote, especially on imports. We are British farming's biggest supermarket customer, which means we can better control our prices. This latest round of crunches demonstrates our commitment to offering the best possible value to our customers this summer."

Spokeswomen for Marks & Spencer and Sainsbury's said there are no plans to follow suit on price cuts. The latter said it has rolled out ongoing price reductions for two years and scrapped multi-pack promotions in favour of regular lower prices.

Co-op said: "Last year we invested heavily in major discounts across over 100 lines of fresh fruit and veg and this is something that we are continuing to roll out. This includes revolving offers in popular produce items such as iceberg lettuce, carrots and cucumbers. Co-op is a leading supporter of British farming and we work closely with producers on quality, value, scale and seasonal availability when produce is at its best and represents great value for shoppers and growers."

Asda and Waitrose did not respond to requests for information.

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