Some of the industry’s biggest players’ margins are being eroded as the effects of recession and a reduction in prices hit the trade.
Some 297 of the UK’s top fresh produce firms are worth a third less than they were a year ago in the clearest indication yet of the damage the recession has wreaked on the market.
However, in a sign that recovery is gaining ground, 410 companies in the market have increased in value, according to a new report by analyst Plimsoll.
English Food and Farming Partnerships chairman Steve Ellwood told FPJ that fresh produce prices - which had been increasing by 15-20 per cent until 2009 before a sharp fall of around five per cent - were partly to blame.
“I am not surprised that the fruit and veg sector has found it tough,” he said. “All of us that work in the sector know that 2009 was a very difficult year. What I am surprised about is the scale of the reduction in value of those 297 companies. But I think that there are a number of reasons to be optimistic in the long term, such as growing demand, wealth increases and world trade expansion.
“The EFFP team has been heavily involved in DEFRA’s Fruit and Vegetable Task Force and with research into producer organisations. It is apparent that in some parts of the sector, UK businesses have found it tough to compete with some overseas rivals.”
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