Are there more prices rises on the horizon?

The Global Coalition of Fresh Produce has recently reported the continuing effects of the increased production and operating costs on the supply chain’s profitability.

The average price of fertiliser, construction, fuel and gas, shipping rates and electricity have all increased by at least 40% over the last three years. Therefore, it is no surprise that consumers have seen inflated prices of fresh produce items. All businesses within the fresh produce industry have been forced to rethink their strategic and operational plans as they are unable to absorb these extra costs.

Examples of possible strategies to lessen exposure to financial risk are:

• To reduce output to lower upfront production costs and possible waste

• To reduce exports

• To reduce investment

Unfortunately the long term effect of all these changes may be to further inflate prices.

With most British fruit and vegetable growers saying there is a high chance of them going out of business in the near future, the government must do more to help with the consequences of these increasing costs. If the reduction in the grower base is allowed to continue unchecked, the opportunities for new and innovative entrants will be massively restricted and improving the industry for the future will be almost impossible.