Co-op Group chief warns grocery shortages are the worst he’s seen

Mr Murrells said labour shortages because of Brexit and Covid-19 were disrupting supplies

Co-op Group CEO Steve Murrells has warned that supply disruptions from Brexit and Covid-19 are causing the worst food shortages he has seen.

He told the Times that some ranges were being reduced because the industry is struggling to get supplies to shops, thanks to driver and other labour shortages from Brexit migration rules and Covid-19.

Mr Murrells made his comments after a widespread reports of stores and fast food restaurants running short of supplies, as labour shortages hit fruit picking and meat processing capacity, as well as HGV drivers to transport goods.

McDonald’s hit the headlines after it removed milkshakes from its menu at 1,250 outlets across Britain, while Nando’s was forced to temporarily close 50 restaurants because of poultry shortages.

Murrells said the crisis was the result of “Brexit and issues caused by Covid”.

The Group is retraining staff as lorry drivers to make up for the shortfall – with the haulage industry losing an estimated 100,000 overall, including 8,000 EU nationals who have left the UK.

Mr Murrells’ comments echo those of other industry figures, with Iceland managing director Richard Walker warning that if the current situation it could affect this year’s Christmas celebrations. He told Radio 4’s Today programme that lorry drivers should be added to the government’s skilled workers list to help recruit people from overseas.

From the agriculture sector, the picture is more mixed. A spokesperson for Openfield, the Lincolnshire-based grain co-op, said: “Our farmers are in the middle of harvest  as they cut wheat and barley and either put the grain into store, or our central storage network. Because of that, harvest time of year can be a little challenging for us, but we haven’t seen any significant disruption to our operations and our own haulage fleet continues to operate normally with a full complement of drivers.”

But Scottish farm co-op body SAOS (Scottish Agricultural Organisation Society) said labour resources are still a cause for concern.

Supply chain development director Alan Stevenson said: “Labour resource continues to be a concern for the sector in terms of processing capacity and having the right skills available. 

“In addition, we are keeping a close watch on the lorry driver situation as we approach harvest time where there is a heavy demand for their services at a critical point for the farming industry. 

“Being part of a co-op is a great help in sharing risk and bringing the operational elements together to plan ahead as much as possible. It still may prove challenging bearing in mind weather factors will come into the equation as well.”

SAOS has also echoed calls from the National Farmers Union for full scrutiny of post-Brexit trade deals which affect the agriculture sector, such as the one recently signed with Australia.

Chief executive Tim Bailey said: “We believe that any and every deal should be fully scrutinised. Only farming systems demonstrably operating to equivalent high standards of food safety, animal health and welfare and environmental protection should gain free trade access to our markets.”

A spokesperson for CQLP, the livestock marketing co-op based in south-west England, said there had been no logistics disruption – but echoed concerns over the Australia deal.

“Farmers work really hard to overcome lots of challenges within their industry and are always striving to do things better; our welfare standards are very stringent and about to become even more so and a  lot of farmers feel this deal would be very dangerous for UK agriculture as firstly Australia’s farmers are allowed to use some banned products such as growth promoters, feed additives and pesticides which doesn’t allow a level playing field and it could encourage other large food producing nations to push for their produce to be allowed onto our market. Thankfully trade in meat is currently very small between ourselves and Australia but if a tariff free deal were to happen it could threaten our whole industry.

“We need a much stricter food labelling system so consumers are informed of their choices. The UK government have been pushing high welfare and food standards onto our industry for years and allowing large volumes of substandard/cheaper products on to our market would be very damaging.”