Food is too cheap says Chicken King as he warns of higher prices
The boss of a West Midlands food group says that it has become too cheap.
Ranjit Singh Boparan, founder and president at Birmingham-based 2 Sisters Food Group, warns that rampant inflation combined with the continuing lack of labour will ultimately result in higher prices.
He is calling for “transparent, honest pricing” of food.
Mr Boparan, known as the Chicken King for his chicken processing factories which include sites at West Bromwich and Wolverhampton, said: “How can it be right that a whole chicken costs less than a pint of beer? You’re looking at a different world where the shopper pays more.
“Government alone can’t fix this. We need to be honest with ourselves and work with our supply chains and customers – but it comes at a cost."
He added that inflationary pressures were “decaying the food sector’s supply chain infrastructure” and he warns of impending double-digit inflation.
He believes cash-strapped British shoppers are facing a ‘great food reset’ with less choice and higher prices.
Mr Boparan said: “The days when you could feed a family of four with a £3 chicken are coming to an end. We need transparent, honest pricing. This is a reset and we need to spell out what this will mean. Food is too cheap, there’s no point avoiding the issue. In relative terms, a chicken today is cheaper to buy than it was 20 years ago."
He added: “Three months ago I was vocal about the Government needing to help with labour issues. I’ve now come to the conclusion that in reality it can’t fix all the problems, nor can it control inflation. The temporary seasonal visas for poultry workers is welcomed, so is the Government’s willingness to look at supply chains, but we need to be honest about the long-term implications.
“Less labour means less choice, core ranges, empty shelves and wage inflation, and this isn’t going to change. We need to work with our supply chains and customers to solve these issues, but it will come at a cost. At the same time, I need to invest, increase automation and make our factories more welcoming for new recruits, which are longer-term goals. But right now I need to be honest about what this means for the consumer as inflation could reach double digits.”
Mr Boparan outlined the massive inflationary challenges throughout the supply chain.
In agriculture farms that rear the millions of chickens have been severely hit. Feed costs are up 15 per cent. Even the less visible commodities have risen by 20 per cent – feed diet supplements, wood shavings for litter; disinfectants; veterinary costs; wages have risen 15 per cent in a year
In transport the HGV driver shortage has sparked wage inflation in the transport sector that is passed on; the double-whammy comes with fuel costs which are now at their highest rate since 2013.
In energy the business’s 600 farms and 16 factories, employing 18,000, are facing soaring energy commodity costs, up 450 to 550 per cent from last year.
In carbon dioxide – critical in the processing of poultry and for packaging – the price of CO2 has risen 400 to 500 per cent in the past three weeks. Despite the Government deal to ensure supplies are maintained, costs have spiralled to levels never seen before
In packaging the cost of food packaging, such as cardboard items and aluminium foil, have risen by 20 per cent in the last six months
Mr Boparan added: “Inflation is decaying the food sector’s supply chain infrastructure and its ability to operate as normal. That’s from farm to your plate. There’s hundreds of farmers out there struggling, and they need our support just as much as anyone. Talk of ‘year zero’ might sound dramatic, but these are the facts: we really have to start thinking differently about what our food priorities are and what they cost.”
“I’m optimistic about our chances of seeing this through, and it’ll need a lot of hard work with everyone from our suppliers, their suppliers, to our customers and the consumer. But I think there’s a willingness to work together and sort this now, rather than waiting and seeing the British food sector wither and die. I don’t want that to happen – I want to be one of the first to face into a crisis that’s not going away and solve it.”
