The news that QV Realisations Ltd, the potato packing and processing operation of the AH Worth Group, has entered administration will have caught the attention of anyone who has been in this industry for some time.
While the wider group continues to operate profitable farming and vegetable packing operations, as well as being a shareholder in joint ventures, for much of the 1990s and 2000s QV Foods (as it was then known) was seen as one of the major potato packing companies in the UK, supplying three leading supermarkets, as well as several food service and wholesale outlets, and producing pre-prepared products.
The story is sadly familiar and shows that supplier rationalisation produces both winners and losers and makes businesses far more vulnerable to subsequent changes in the market. While the particular difficulties of the last two seasons have been critical factors, the loss of the company’s main potato contract last summer cannot have helped.
QV is not the only high profile fresh produce business in recent months. Leading top fruit and salad suppliers have also ceased trading and in at least one case the main cause was the loss of a primary supply contract, despite significant investment in the business by shareholders.
After years of declining UK production and low prices, the record prices seen for potatoes this season will be welcomed by growers but as shown by QV, will be crippling other parts of the supply chain. If such prices help to restore confidence in the sector, that will be great, but as Mark Taylor, chair of GB Potatoes recently pointed out, this continual cycle of boom and bust benefits no one, and a more mature, long-term approach is required to restore value to the market and ensure that the whole supply chain gets a fair return and build a truly sustainable industry.
This is equally true of other vegetable and fresh produce sectors. Economic factors and climate change mean that food production will only become more risky and volatile in the future. Those customers who cannot or will not engage with their suppliers will be the ones who suffer and struggle to supply their consumers with the products that they have become used to.
Consequently, growers have some interesting choices in this General Election.
While there is widespread disillusionment with the Conservatives, it must be said that the recent initiatives announced by Rishi Sunak have gone a long way to undo the damage caused by previous Defra disinterest. The Blueprint for Growing the UK Fruit and Vegetable Sector is the clearest statement of political intent our industry has had in over a decade. Less welcome is a pledge to move away from the reliance on seasonal migrant labour with a five-year tapered visa scheme. Reform’s proposals to tax those who employ migrant labour would have even worse effects on horticultural businesses.
Both Labour and the Liberal Democrats have worked hard to position themselves as parties which really value British farming, but while their manifestos are full of warm words, the NFU has expressed dismay at the lack of a specific agricultural budget in Labour’s manifesto. The lack of coherent action on a long-overdue national action plan for pesticide use is also disappointing (although there are commitments to remove the emergency use of neonicotinoids for sugar beet seed treatment).
Whichever party forms the next government, farmers and growers will be looking for quick and decisive policies to tackle the numerous challenges we face, not just warm words which fail to deliver.
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