The founder of 2 Sisters Food Group claims U.K. supermarket shelves will be bare and panic buying will intensify unless critical issues currently threatening the U.K. food supply are solved promptly.
Ranjit Singh Boparan, founder and president at 2 Sisters Food Group, says the current challenges facing the sector are like no other he has seen in his 27 years as a food entrepreneur.
Boparan said: “I have seen lots of change over the years – but nothing compares to now. The use of the term ‘perfect storm’ has become a cliché, but never has that been a truer phase to use. No one could possibly have predicted that this toxic cocktail would come together at this time. It started with the (COVID-19) pandemic – and in the last week or so with ‘pingdemic,’ but since May this year the operating environment has deteriorated so profoundly I can see no other outcome than major food shortages in the U.K. Supply of chicken and turkey is under threat. Our retail partners and the wider supply chain have worked together closer than ever before to ensure we retain food supply and this is of huge credit to everyone. But we are at crisis point.
“We are operating in a framework that’s complete madness and the government needs calling out for sticking their heads in the sand. ‘Pingdemic’ is not the issue for us. There’s fundamental structural changes going on here that need sorting. Why is the Government still paying furlough to around two million people with the economy essentially open and yet we have an on-going labor crisis? Why is it not reclassifying our frontline workers to the correct status so we have a corridor open for EU workers into the U.K.? Why is it not allowing for key workers in the food industry who are double vaccinated to continue their work when they are “pinged”? The government needs to act immediately if it wants to avoid the most serious food shortages that this country has seen in over 75 years. Not acting would be irresponsible.”
He spelled out the current challenges facing his business and the wider food and retail sector:
Security of food supply under severe threat
Brexit has acutely reduced available workers across the food sector. 2 Sisters has seen, on average, 15% labor shortages for its 16,000 workforce this year, the majority who work in chicken and ready meal production facilities
Unsustainable operating environment
The food sector has suffered major hits with ingredient inflation. Feed inflation is at an eight-year high. Wheat, soy and other components have risen by more than 50%; packaging up 20%; Energy costs up 30%. Some food sector items such as stainless steel equipment have doubled in cost. Also, Boparan said 2 Sisters has seen unprecedented wage inflation across its supply chain in skilled roles; ranging from hatcheries, to farms, to logistics and delivery – wage inflation is now way in excess of annual increases.
Facing the COVID reality
2 Sisters has never been free from the pandemic, he said. The heavy investment to keep colleagues safe will continue for at least another 12 months, regardless of Government lifting of restrictions. Rules around self-isolation will continue as before, compounding the labor shortage issue even further, he said.
Facing the Brexit reality
Brexit has not been a success, according to Boparan. Trading conditions with the new regime for import and export has increased complexity and administration and this will continue indefinitely, causing major on-cost and resource difficulties.
He explained: “These are unique, era-defining challenges which we started to tackle head on last year. But they’ve all come to a head in the past 12 weeks. Clearly these have brought continued and intensive pressure on our business, just like they have elsewhere.
“This cannot be sustained indefinitely. The critical labor issue alone means we walk a tightrope every week at the moment. We’re just about coping, but I can see if no support is forthcoming – and urgently – from Government, then shelves will be empty, food waste will rocket simply because it cannot be processed, or delivered, and the shortages we saw last year will be peanuts in comparison to what could come.”
Boparan has called on the government to act now to support the sector given its unprecedented challenges.
He added: “Entry level – that’s broadly unskilled - roles (requiring a Level 2 qualification) are where the sector is facing greatest difficulty. Poultry workers should be exempt from this and the government needs to think again on the entry thresholds for salaries and skills.
“What needs to happen is an entry route should be plotted so workers face minimal administrative hurdles to get through to support businesses like ours. We also need recognition from the entire supply chain – that’s our suppliers, customers and ultimately the end consumer – that without the correct level of support, we are potentially facing a food crisis in the UK like we’ve never seen before.”