'We're weeks away from gaps on the shelves': Business leaders issue stark warning to PM over food shortages

ITV News Business and Economics Editor Joel Hills has the details of the warning

Food producers and road hauliers have warned the government that the supply of food and drink to supermarkets is “failing” due to a chronic shortage of HGV drivers.

In a letter to the prime minister, the leaders of a series of business groups across the food and logistic sectors say that the number of unfilled vacancies has risen above 100,000 and is now “at crisis point.”

They blame recruitment problems on a number of factors, including:

  • A fall in the number of EU nationals available to work in the UK as a result of Brexit.

  • A fall in the number of UK nationals training as HGV drivers due to restrictions during the pandemic.

  • An increase in the number of HGV drivers who retired during lockdown.

  • And IR35 - a change in the taxation rules - which has reduced the amount of money self-employed drivers are able to earn.

Companies have been raising concerns about driver shortages with government for several weeks but are concerned that “there is no immediate plan”.

Business leaders are calling on the PM to intervene personally in the matter. Credit: PA

The letter, which was sent today, was organised by the Road Haulage Association and calls on Boris Johnson to intervene personally.

Signatories include: the Food and Drink Federation; British Frozen Food Federation; Federation of Wholesale Distributors; Cold Chain Federation; Meat Producers Association and the British Beer and Pub Association.

It states: “We firmly believe that intervention from the Prime Minister / Cabinet Office is the only way we will be able to avert critical supply chains failing at an unprecedented and unimaginable level. Supermarkets are already reporting that they are not receiving their expected food stocks and, as a result, there is considerable wastage.”

“We are weeks away from gaps on the shelves, it is as serious as that,” says Richard Burnett, the chief executive of the Road Haulage Association.

“The government needs to treat this as an absolute priority.”

  • Richard Burnett: 'Some in government think the industry is crying wolf, we are not crying wolf'

None of the UK’s supermarkets have signed the letter but last Wednesday - at a meeting hosted by Baroness Vere, minister for transport, and Mims Davies, minister for employment - Tesco revealed that the shortage of drivers is delaying deliveries and creating an additional 48 tonnes of food waste each week - the equivalent of two articulated trucks.

According to several people on the Teams call, Tesco’s Director for Transport, Matthew Rhind, said there is an urgent need for action.

Rhind told the meeting ”the food waste impact of the driver shortfall has significantly impacted our supplier’s ability to respond to our orders. In the recent weeks, we have seen a 13% increase in products being wasted or placed in the bin. We absolutely agree that the can cannot be kicked down the road”.

Later in the call, Dave Jacobs, Director for Logistics at Sainsbury’s said “[I] agree with Matt Rhind in terms of the waste impact across the Fresh Supply Chain”.

After the meeting, Logistics UK, whose members account for half of the lorries on UK roads, wrote to Baroness Vere. The letter states that 1 in 3 of its members are unable to fill vacancies and that, in the last year, one third of EU nationals working as drivers in the UK have returned to their home nations. It adds “wages for logistics drivers have risen by as much as 20%”.

The supermarkets admit that a shortage of lorry drivers is causing “minor” disruption and that in recent weeks there have been issues with the supply of some salads, fruit and berries, yoghurts, vegetables and bottled water.

Mims Davies, minister for employment, hosted a meeting with the UK's supermarkets. Credit: PA

A spokesperson for the British Retail Consortium said: “Supermarkets are working closely with their suppliers to ensure that consumers still have access to the same great selection of goods. Government must rapidly increase the number of HGV driving tests taking place while also looking for a long-term solution to this issue”.

Recruitment shortages aren’t limited to lorry drivers. Across the food industry, companies are reporting problems recruiting the employees they need, from farm hands to factory workers.

“I think we are heading towards a brick wall in a car with no brakes,” says Nick Allen, chief executive of the British Meat Producers Association (BMPA), which represents companies in the beef, pork and lamb industry. Its members include the likes of Cranswick, Karrow, Pilgrims and Dawn Dunbia.

Allen estimates that in meat processing factories alone there are currently around 15,000 vacancies nationwide, almost five times the normal level.

  • Nick Allen believes the problems will lead to customers having to pay more for food

“Brexit was the start of our problems, Covid has made things worse,” he explains.

Allen says basic pay in the industry has risen by “close to 10%” in the last few months months but companies are still struggling to attract staff.

“I have never have had chief executives of massively large companies phone me up and say ‘Nick, we have to do something. We have to get the message through to government, to people, that we are weeks away from a crisis.’ I have never had that happen. It’s extraordinary.”

The BMPA says that the recruitment issues are so pressing that its members will soon have to cut production and that, if they do, it will affect the availability and the price of meat.

“Consumers won’t be able to get all that they want, whether it be in shops or restaurants,” Allen says. “We’re not going to run out of food completely but they’re not going to be able to get the choice and they’re probably going to have to pay more for food”.

“The government don’t seem to be acknowledging there is a problem and talking to us about the solutions,” he added.

Business groups want the government to relax post-Brexit immigration rules by introducing a temporary worker visa for HGV drivers and adding the occupation to the Home Office Shortage Occupation List along with butchers.

Food shortages have been an issue at supermarkets in recent days.

As it stands, the Home Office is refusing to do this.

Tonight, in a statement, a government spokesman said: “We have met with industry figures to discuss HGV driver shortages and possible solutions around recruitment and retention.

“Most of the solutions are likely to be commercial and from within industry, with progress already being made in key areas such as testing and hiring, and a big focus towards improving pay, working conditions and diversity.

“Our new points-based immigration system makes clear employers should focus on investing in our domestic workforce, especially those needing to find new employment, rather than relying on labour from abroad.”

The number of vacancies in the economy has risen sharply since restrictions began lifting in April and the recovery got underway. But the evidence suggests that firms are reporting labour shortages across a range of sectors.

There are a number of reasons why but Brexit is first among them. The pool of migrants available to work has inevitably shrunk since free movement of labour ended in January.

While this creates headaches for companies and puts pressure on supply chains, the other side of the same coin is that low-income workers are suddenly finding that the balance of power between them and employers has shifted - they now have leverage that they haven’t had for years.

The young and the low paid bore the brunt of the downturn COVID triggered. They were laid off or furloughed in greater numbers than anyone else.

There are still around 3 million people in the UK who are being paid by the government to stay at home. Not all of them will find they have jobs to return to when furlough support is withdrawn. Those who don’t may be surprised how easy it is to get back into work.