Contractual relationships in the UK fresh produce industry

Overview

The UK government is committed to tackling contractual unfairness where it exists in the agri-food supply chain. At the UK Farm to Fork Summit held at Downing Street on 16 May 2023 the UK government announced a new review into fairness in the horticulture supply chain to support British farmers and improve food security. This builds on the reviews we already have underway using powers under s.29 of the Agriculture Act 2020 to improve transparency and fair contractual dealing in the dairy and pork sectors, and in October launched a review of the egg sector. The focus of this review is on fresh produce in the edible horticulture sector, referred to as ‘fresh produce’ throughout this consultation. 

There are hundreds of different fresh produce crops which vary greatly in terms of the market the produce is sold to, growing conditions, and perishability. Industry and government have developed various methods for grouping fresh produce crops; however, there is no one consistent method that meets every need. To reflect existing grouping methods whilst meeting the specific needs of this review, we have categorised crops into 16 groups, listed in question 14. 

The fresh produce sector has faced numerous significant challenges in recent years that have impacted crop production across the sector. Energy, fuel, and labour costs have risen significantly at the same time as the sector has dealt with the impacts of unprecedented and volatile climate conditions. The impacts can be seen across the sector; for example, industry has reported a reduction in tomato and berry production in the past couple of years with further reductions expected next year. 

Industry engagement has highlighted concerns over declining profitability within the sector, leading many producers away from the industry, particularly where crops require specialist infrastructure with higher associated costs of production. Significant production cost increases add to supply concerns, if returns are unsustainable; for example, industry have reported that the cost of potato production has increased significantly in recent years.  

This consultation follows similar consultations that have already taken place looking at the dairy, pig and egg sectors, and is our next step in delivering on the UK government’s commitment to consult on the need for supply chain fairness regulations on a sector-by-sector basis.