How the Ukraine crisis will affect the fine food industry

02 March 2022, 08:00 AM
  • The current war between Ukraine and Russia is creating a wave of uncertainty across the globe. But what does this mean for the UK food industry, and what effect will it have on indies over the coming months?
How the Ukraine crisis will affect the fine food industry

Inflation and food shortages
Economists are predicting that inflation will rise to a staggering 8.2% by April if the jumps in oil, gas and electricity products are sustained, a further increase from the 5.5% figure it hit in January.

According to Fraser McKevitt, Kantar’s head of retail and consumer insight, “This is the fastest rate of inflation we’ve recorded since September 2013. 

“Added to this, ongoing supply chain pressures and the potential impact of the war in Ukraine are set to continue pushing up prices paid by consumers.”

But it’s not just inflation that is causing disruption to the food industry, as experts are warning that food shortages will also plague Europe. 

“Past experience tells us that disruption to Ukraine’s exports will have an impact on global food supplies and on the price of a range of key commodities, such as vegetable oils and maize, which are important in UK food production”, said FDF’s chief executive Karen Betts.

In fact, both Russia and Ukraine have at times been dubbed “the breadbasket of Europe” due to their high exports of wheat and sunflower products across the Continent. 

However, industry insiders believe that indies can combat the threat of shortages by focusing on British-made products and avoiding the reliance on external trade. As Michael Freedman, senior shopper insight manager for IGD’s ShopperVista pointed out: “Previous periods of economic pressure, such as the credit crunch and recession in 2008, didn’t see shoppers abandoning this desire [for artisan products], so there is no reason to expect they will do now.”

If anything, the crisis will demonstrate that British reliance on imported products can sometimes be a risky business, and by supporting local producers, independents can not only offer a stable foundation for their local food ecosystem but potentially avoid the impact of international fallout in the process.

Reduction in seasonal workers
In recent years Ukraine has emerged as a major exporter of seasonal workers in the UK, amounting to 67% of the total workforce. However, with 18–60-year-old men being urged to sign up to the Ukrainian army and UK visa services in Kyiv suspended, UK farms could face drastic shortfalls in seasonal workers this year.

Ukrainian workers already in the UK have had their seasonal visas automatically extended until the end of 2022, but with many returning to Ukraine to fight for their families and homeland, it is unknown how many actually remain. 

This will continue to put pressure on the farming industry and likely push up prices of fruit and vegetables due to farmers leaning on the more expensive UK workforce to plug the gap.

Speaking about the value of Ukrainian workers in the sector, NFU president Minette Batters commented: “Ukraine is a key supplier of agriculture commodities to the global market, accounting for 10% of world export trade in wheat and over 15% in maize, and many Ukrainian workers come to the UK for key agricultural jobs. We will be working with our members to seek solutions to any future workforce issues which may arise. At the moment our overriding thoughts are with the people of Ukraine.”

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