UK Producers and packhouses are struggling to keep up with spiralling labour costs, as their retail customers tighten the squeeze on prices, warn gangmaster bosses.
While welcoming the fact retailers are insisting on suppliers adhering to the new code of practice for labour providers, Mark Boleat, chairman of the Association of Labour Providers (ALP), said the fact the supermarkets are also demanding lower prices is causing problems.
“The retailers are applying the code throughout the fresh produce industry, while at the same time, they are wanting to pay less and less. As a result, the packhouses are being expected to accept less money but increase their costs,” he said.
The knock-on effect is labour providers are finding themselves being put under increasing pressure by labour users.
Speaking at the ALP’s annual meeting this week, Boleat said: “They [suppliers] are being told they must comply with the code by their customers, but this cannot be done for nothing.
“Where a labour provider also provides transport, then something in the region of £6.30 an hour is necessary to cover the costs of complying with the minimum wage.
“But labour providers are finding themselves in the position of being told that if they won’t work for £5.80, £5.60 or even £5.40 an hour then there are plenty of others who will.”
The ongoing price pressure, Boleat said, is pushing users to look to the illegal option: “Unfortunately, the reality is that it is still all too easy to find illegal labour.”
A further impact could also see business being pushed abroad, he added, with retailers looking for cheaper more competitive sources overseas.
However, consultant Zad Padda, of Ethical First, defended the retailers. “It’s too simplistic to connect the two issues of labour and price pressure. It’s unhelpful to start laying blame, we need to get the industry working together.
“All the retailers are putting considerable resources into this issue,” Padda added.
Boleat also hit out at the government’s recent announcement of plans to merge the newly formed Gangmaster Licensing Authority (GLA) into the Health and Safety Executive (HSE) within the next three years.
“This won’t happen because it’s so stupid, it simply doesn’t make sense for anybody, including the HSE,” Boleat said.
He added that no synergies exist between the GLA and the HSE which he believes makes a merger pointless. But he said the fact that an initial proposal has been tabled will lead to precious time and energy being devoted to avoidance of the merger, rather than focused on the real problem of sorting out the labour issues plaguing the industry.
“It won’t happen but a great deal of work will need to be done to ensure that the merger doesn’t happen. This really is a distraction we can do without,” Boleat said
