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Sunday, November 28, 2021

Turkey, toys and trees at risk this Christmas


Brits are facing a barren Christmas with a perfect storm of gas and lorry driver shortages threatening to make festive dinner favourites unavailable – alongside toys, vinyl, books and even Christmas trees. 

Food supply chains have been placed under intense stress in recent weeks because of a shortage of around 100,000 HGV drivers – with empty shelves across some UK supermarkets as a result.

They were further damaged after two plants that produce 60 per cent of the UK’s CO2 were shut down amid rising gas prices. CO2 is used for everything from the humane slaughter of chickens and pigs, to putting the fizz in soft drinks and creating packaging that keeps foods fresh.  

Now, there are fears that shortages could bite households in the run-up to Christmas. 

The classic Christmas dinner could be decimated, with turkey, pigs in blankets, potatoes and brussel sprouts all at risk. 

Meanwhile, toys, vinyl and books could also experience shortages – with experts even warning of Christmas tree issues.  

Despite the government agreeing a deal to restart production at the CO2 plants, industry bodies have warned that consumers may still see a hike in food prices, particularly if the cost of carbon dioxide rises. 

The government’s deal with CF Industries is only in place for three weeks – leading to fears that the issues could start up again in the run-up to the festive period.  

The boss of Tesco warned last night that shoppers are facing a five per cent hike in food prices amid the lorry driver and gas shortages.  

Christmas at risk: 

Food supply struggles as shortage of 100,000 lorry drivers means supply chains have been under stress, leading to empty shelves;

Meat supply damaged by lack of drivers – as well as CO2 crisis, with the gas used in slaughter and storage;

Fruits and vegetables also damaged by CO2 crisis with the gas used to store vegetables and extend shelf life;

Christmas trees could be in short supply with driver shortage in Denmark affecting firms being able to bring them to the UK;

Toy shortage caused by supply issues with firms struggling to import from Asia;

Soaring demand for vinyl, coupled with logistic and supply issues;

Waterstones and other booksellers have warned of shortages caused by lack of delivery drivers.  

A graphic illustrating how the three issues are currently affecting the UK and the problems it is causing. The People's Energy Company (bottom, middle) is one of the energy suppliers that have already gone bust

A graphic illustrating how the three issues are currently affecting the UK and the problems it is causing. The People’s Energy Company (bottom, middle) is one of the energy suppliers that have already gone bust

Consumers have been warned of a potential shortage of Christmas trees by Mark Rofe (pictured), owner of ChristmasTrees.co.uk

Consumers have been warned of a potential shortage of Christmas trees by Mark Rofe (pictured), owner of ChristmasTrees.co.uk

Speaking to ITV’s Robert Peston last night, the supermarket’s chairman John Allan warned of a perfect storm of issues and said efforts were being made to avert a ‘horrendous crisis at Christmas‘. 

He said: ‘I think it’s almost impossible to forecast, but I mean I think we’re probably looking at, for food overall, you know, mid-single digit increases which is much higher than we’ve had in recent years.

‘I think certainly while we get through this particular set of issues that we’re contending with, which include shortage of labour in a number of important areas of food manufacturing, shortage of HGV drivers, which can be fixed, and we’re all working very hard to fix.’

Leading turkey farmer Paul Kelly, who hatches 2 million of his own breed KellyBronze birds a year, accounting for 27% of all turkeys sold at Christmas, said CO2 was used in the slaughter process and more importantly to keep the product fresh.

‘Carbon dioxide is used to extend shelf life, so when you put a turkey in a bag, you suck the air out and you blow carbon dioxide in and that stops the bugs growing, ‘ he said.

‘We can’t create millions and millions of turkeys all in the week before Christmas, it has to be spread over a few weeks so if (CO2 production) really wasn’t back up and running, it would be another car crash.’

Iceland boss Richard Walker warned earlier this week: ‘This is no longer about whether Christmas will be OK. This is more about keeping the wheels turning and the lights on so we can actually get to Christmas.’ 

He said today: “If the food industry was just facing a CO2 crisis we could probably weather it and muddle through, but of course it’s compounded by a whole array of other issues, not least the HGV driver shortage.

“We have 100,000 short in this country, my business has about 100 HGV drivers short, and that is making it increasingly very, very difficult to service our shops.

“We never had to cancel a single delivery throughout the pandemic, and yet now we’re having to because of this shortage, so I think it is a concern.

“And as we look to build stock as an industry to work towards our bumper time of year, Christmas, we’re now facing this shortage at the worst possible time. 

“In the short term I’m more confident that supply chains will be more uninterrupted. However I think we’ve now got to think longer-term. This loan is only three weeks: what happens after that, or what happens the next time the gas prices spike?

“So we need a broader, more diverse and therefore more sustainable energy mix so we’re not so reliant on gas. We also need to look as a food industry, but also further up the supply chains, at different, better ways of capturing CO2 and potentially using alternative gases as well.”

Tesco chairman John Allan admitted that food prices could rise in the run-up to Christmas

Tesco chairman John Allan admitted that food prices could rise in the run-up to Christmas

Shelves in a supermarket look sparse yesterday as supply chain issues continue in Northwitch

Shelves in a supermarket look sparse yesterday as supply chain issues continue in Northwitch

Nick Allen of the British Meat Processors Association said that CO2 problems could decimate the food industry. 

He said this week: ‘The animals [would] have to stay on farm, they’ll cause farmers on the farm huge animal welfare problems and British pork and British poultry will disappear off the shelves.’ 

The chairman of the National Pig Association also previously warned that if the situation facing the pork industry does not change, farmers will be forced to ‘slaughter their own animals’ due to a lack of space and feed. 

Rob Mutimer, chairman of the National Pig Association, said: ‘The only end game there is we as farmers are going to end up slaughtering our livestock – not for the food chain but to put them into rendering, to dispose of carcasses like what happened in foot and mouth. And that’s a terrible situation to be in.’

Ranjit Singh Boparan, the owner of Great Witchingham-based Bernard Matthews and 2 Sisters Food Group, said: ‘There are less than 100 days left until Christmas and Bernard Matthews and my other poultry businesses are working harder than ever before to try and recruit people to maintain food supplies.

‘Nothing has fundamentally changed since I spoke about this issue in July. In fact, I take no pleasure in pointing out that the gaps on the shelves I warned about then are getting bigger by the day.

‘The supply of Bernard Matthews turkeys this Christmas was already compromised as I need to find 1,000 extra workers to process supplies. Now with no CO2 supply, Christmas will be cancelled.

‘The CO2 issue is a massive body blow and puts us at breaking point, it really does – that’s poultry, beef, pork, as well as the wider food industry.’

Fruit and vegetables will also be affected if the CO2 issues continue –  particularly amid the well publicised shortage in fruit pickers following the pandemic. 

The potential shortages mean that Brits could be faced with a very different Christmas dinner to usual. 

Gifts may also have to change with several industries also admitting shortage fears as supply and driver issues hit. 

Chris Bonnett, the founder of GardeningExpress.co.uk, warned that Christmas trees could also see a shortage.  

Lorry driver shortages in Denmark are expected to impact imports to the UK with any Covid related restrictions further adding to the problems.

He’s also expecting a surge in demand after last year’s muted celebrations as families and friends celebrate the festivities together.

Denmark is a major producer of live Christmas trees with around 90% of its crop exported to other European nations. 

Mr Bonnett said: ‘The last few years have played havoc with the Christmas tree market. Mild winters in Scandinavian countries have made it more complicated to fell trees. Add in the Covid restrictions in place last year and the current shortage of lorry drivers and you can see why we’re concerned that there could be a shortage of trees.

‘A Christmas tree is an essential part of the festivities, not just on Christmas Day but in the run up – picking the tree, squeezing it into the car and decorating ahead of the celebrations.

‘This year it’ll mean even more after the locked down restrictions of last year which is why we’re already seeing a surge in the number of customers searching for Christmas trees.

‘Hopefully between now and December, things will improve.’

Empty shelves are seen in the meat aisle of a Co-Op supermarket branch in Harpenden

Empty shelves are seen in the meat aisle of a Co-Op supermarket branch in Harpenden

Meat manufacturers have warned that shoppers are likely to face higher prices as a result of the surge in CO2 costs

Meat manufacturers have warned that shoppers are likely to face higher prices as a result of the surge in CO2 costs

Bonnett added: ‘We are seeing issues with disruption across the retail sector, from food and drink to gifts and clothing.

‘For Britons really wanting to go all out to celebrate this year, the best advice is to plan ahead and get all the essentials pre-ordered so you can enjoy the festivities without the stress.’

Meanwhile, industry body the Toy Retailers’ Association said there would be less choice than previous years for parents wanting to buy toys for their children over Christmas. 

Suppliers blamed rising shipping costs and the ongoing shortage of HGV drivers for potential shortages. 

TRA chair Alan Simpson said to parents: ‘If you see it, buy it.’

‘If you think you are going to go into toy stores in December as you normally would do… and you are going to get what you want, you will be very disappointed,’ he added.

Barry Hughes, managing director of Golden Bear Toys, based in Telford, described it as ‘a perfect storm’.

He said: ‘Undoubtedly we are going to see prices rising. It is not just going to be toys, it will be everything.’

Demand for vinyl is at record levels in the UK, however, a lack of producers and distribution issues means shortages could be ahead. 

Artists have been forced to push back release dates for new music while awaiting vinyl production, while sellers have reported delays of up to a year for records to be created. 

The pandemic, they say, has exacerbated the situation, something that major booksellers in the UK, including Waterstones, have also reported. 

Foyles and Daunt Books founder James Daunt said. ‘We will have shops fuller than ever before to make sure we don’t get caught by logistics problems as we did last year.

‘My concern is that at the beginning of December if we need 50,000 copies of whatever unforeseen literary hit and it’s not there’ 

However, Tesco boss Mr Allan insisted there was no need to panic buy and that Christmas would not be ‘terrible’.   

He said: ‘I don’t think the end result will be a horrendous crisis at Christmas. I would hate for people to get the impression that we are going to have a terrible Christmas and they’ve got to go out and panic buy.’

Average household bills in the UK are set to rise for 'standard variable' customers when the new price cap comes into force next month. The price cap, set by regulator Ofgem, will stop bills rising above £1,277 a year. Ofgem has already announced a further price cap rise for April next year, and this will see prices capped at £1,455. It is unclear whether the price cap will rise again the following October. Given the global uncertainty with wholesale gas prices, UK energy firms have today introduced 'fixed rate' deals up to £600 more than the £1,455 April cap, hoping customers fearful of ever-changing prices may prefer to a higher monthly tarriff, but one they are guaranteed will not fluctuate due to market forces - meaning families can accurately factor in energy costs into their household expenses. Setting the cost of a product way above the expected market value is known as 'price gouging'.

Average household bills in the UK are set to rise for ‘standard variable’ customers when the new price cap comes into force next month. The price cap, set by regulator Ofgem, will stop bills rising above £1,277 a year. Ofgem has already announced a further price cap rise for April next year, and this will see prices capped at £1,455. It is unclear whether the price cap will rise again the following October. Given the global uncertainty with wholesale gas prices, UK energy firms have today introduced ‘fixed rate’ deals up to £600 more than the £1,455 April cap, hoping customers fearful of ever-changing prices may prefer to a higher monthly tarriff, but one they are guaranteed will not fluctuate due to market forces – meaning families can accurately factor in energy costs into their household expenses. Setting the cost of a product way above the expected market value is known as ‘price gouging’.

Yesterday, Tesco revealed it was currently suffering a shortfall of approximately 800 HGV drivers as it urged the Government to ease restrictions on foreign workers to help alleviate the supply chain crisis.

Despite being the UK’s largest supermarket chain, and offering new employees a £1,000 bonus since July, Andrew Woolfenden, Tesco’s distribution and fulfilment director, warned they were still unable to make up the lost numbers. 

Slamming the problem as ‘industry-wide’, Mr Woolfenden compared companies desperately trying to recruit from a limited pool of expert drivers to ‘moving deckchairs around’.

He warned ITV News: ‘Our concern is that the pictures of empty shelves will get ten times worse by Christmas and then we’ll get panic-buying.’

Despite gaps appearing on supermarket shelves across the country this summer, consumers are yet to see a return of full-scale panic buying that was endured at the start of the pandemic.

But concerns are continuing to grow should demand suddenly surge again – with replenishing empty shelves already an issue for most major UK retailers.

Trade association Logistics UK has called on ministers to provide up to 10,000 temporary work visas for trained EU drivers to paper over the cracks.

The Government has so far rejected these calls, instead insisting firms recruit from a pool of British workers.

It comes as shorter, fast-track HGV tests have been mooted as a potential solution to help plug the spiralling vacancies in the haulier industry.

Industry experts say better pay and improved working conditions are needed to help improve staffing levels – and put the shortage largely down to Brexit and the pandemic, which led to 14,000 European drivers going home and just 600 of those returning.

The Road Haulage Association said the total number of people in the UK with HGV licences this summer is 516,000. But the latest Department for Transport data shows 278,700 HGV drivers were employed in 2020, equivalent to 54 per cent of the total.

The crisis, which has also been made worse by Covid-related delays to testing new drivers, has seen supermarket shelves across the country go empty as companies struggle to restock their products. 

But Tesco’s chief Mr Woolfenden issued the stark warning that consumers could see even more barren shelves by December – alongside a return of panic buying.

A spokesperson for the supermarket said: ‘We have good availability, with deliveries arriving at our stores and distribution centres across the UK every day.

‘While the industry-wide shortage of HGV drivers has led to some distribution challenges, we’re working hard to address these and to plan for the months ahead, so that customers can get everything they need.’

Exacerbating the issue is a roaring debate over limited nationwide supplies of CO2, commonly used in the food and drink industry, and how the Government plans to ensure families don’t have to choose between ‘heating’ and ‘eating’ this Christmas.

Prime Minister Boris Johnson triumphantly declared yesterday that ‘Christmas is on’, after the Government struck a short-term, taxpayer-funded deal with CO2 producers to avert food shortages.



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