Food industry bosses have said that despite government assurances that the festive season is “safe” from labor shortages and rising electricity prices, shoppers could face gaps on supermarket shelves this Christmas.
Nick Allen, chief executive of the British Meat Processors Association, said, “Our members are telling us they are weeks behind with Christmas preparations, they’re not really optimistic about being able to deliver.”
Mr Allen said the ongoing labor shortage had not been resolved and questioned the government’s claims that a deal to protect the supply of CO would be enough to keep meat stocks strong.
CO2 is used to wonder animals before slaughter and to keep produce fresh, making it vital to the meat industry.
The consequences of running out of CO2 for animal welfare and the food supply chain would be “absolutely unimaginable”, Mr Allen said.
However, the issue was a “much unwanted distraction” from much-needed concerns about a continuing shortage of workers.
“It’s a really serious problem. That’s what’s causing the shortage on the shelves.”
The British Poultry Council said producers have “heaved a sigh of relief” that CO2 will now be available, even if prices are far higher.
“But we are back where we were a week ago,” a spokesperson said. “The issues around labor are still going on. Major food companies are saying we are in the worst situation ever.”
The BPC estimates that there will be 20 percent fewer turkeys this Christmas season.
BMPA and BPC were among 12 food and beverage trade bodies that signed a letter this week calling on the government to immediately introduce a COVID-19 recovery visa so that they can recruit employees from overseas.
The letter reads: “Without it, more shelves would be empty and consumers would panic trying to survive the winter.
“That’s why we need to have an immediate commitment from you so that the industry can recruit from outside the UK over the next 12 months to help us winter and help us save Christmas.”
Food companies are seeking one-year visas that will enable companies to recruit for key roles in the supply chain. They also seek a commitment to a permanent, revised and expanded seasonal worker scheme for UK horticulture.
On Thursday, labor shortages caused some petrol forecourts to run out of petrol, forcing BP and Tesco to close some sites and rationing fuel.
BP will limit deliveries of petrol and diesel to its forecourt to ensure that supplies do not run out.
BP’s head of UK retail Hannah Hofer described the situation as “bad, very bad” and warned the government it was important it understood the “urgency of the situation”.
It came as experts warned the UK gas supply crisis was set to continue for months, with little sign of a fall in record-high gas prices that have threatened fresh food supplies, Steel plants have been forced to stop production and 1.5 million gas has been released. Electricity customers are in limbo after suppliers collapse.
Wood Mackenzie’s principal energy analyst Graham Friedman said prices are likely to remain higher throughout the winter.
“There are a lot of question marks around supply. I don’t think there is any chance of a sharp drop in prices. It is highly unlikely that they will go back to historical norms in the next few months.
“The fundamental dynamics of the market are not changing.”
Mr Friedman said one thing that could help ease the situation is to bring back online if UK production goes offline for essential maintenance.
There is also the possibility of Russia – Europe’s most important supplier of gas – boosting supply.
“We think there will be some flow from Russia through the new Nord Stream 2 pipeline before the end of the year. The question is how much spare capacity Russia has. We don’t think Russia is holding off that much supply.”
Publicly quoted prices show natural gas for delivery in October is £181 a therm, slightly below the record price on Monday but still well above normal levels. November costs £186, December £188 and January £189. The prices are not expected to drop significantly till April next year.
UK Steel, an industry trade body, warned that continued high prices and further spikes for gas could bring a winter of temporary shutdowns as plants become impractical.
Spokesman Frank Askow said some firms were forced to temporarily halt production last week and earlier this week as gas prices soared up to 50 times their normal levels. For less time than last year’s average of £50 per MW, the price rises to £2,500 per MW.
“The cost of producing steel effectively doubled in that time,” Mr Askov said. He said UK steel plants run the risk of losing out to competitors in countries such as France and Germany where gas price growth has been low.
One manufacturer, British Steel, said: “These huge, unprecedented growth makes it impossible to profitably make steel at certain times of day. And with the coming of winter, when demand picks up, prices could be significantly worse.”
“We are maintaining production at normal levels but such large additional costs cannot be easily absorbed or ignored.”
Credit: www.independent.co.uk /