Summary of responses and government response
Updated 14 May 2024
© Crown copyright 2024
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/consultations/the-uk-fresh-produce-sector-review-of-the-supply-chain/outcome/summary-of-responses-and-government-response
Introduction
Between December 2023 and February 2024, Defra, in collaboration with the Scottish Government, Welsh Government and the Northern Ireland Executive, conducted a public consultation exploring contractual relationships in the UK fresh produce sector.
The consultation was hosted on the online platform Citizen Space, and responses were also collected via post and email.
The consultation aimed to understand whether contract reform could provide greater certainty to fresh produce producers and others in the supply chain, by ensuring that clear terms and conditions are established in contractual agreements and improving access to data. The consultation first invited views on whether legislation in this area was needed, before a more detailed series of questions covering topics such as the availability and use of data and typical components of fresh produce sale agreements.
This report summarises the analysis, responses received and sets out proposed next steps.
About this analysis of responses
Questions 2,3 and 4 are not shown in this document. These questions asked the respondents for their name, email address, and business, and as such will not be analysed.
134 responses to the consultation were received; 117 through the online survey hosted on Citizen Space and 17 via email. The quantitative analysis tables in this summary of response document include the 117 responses from the online survey. The qualitative narrative analysis includes all responses where comments were submitted through the online survey and email submissions. Not all respondents answered every question, and where statistics are included in the summary, the data represents only those who responded to that question.
It is important to keep in mind that public consultations are not necessarily representative of the wider population. Since anyone can submit their views, individuals and organisations who are more able and willing to respond are more likely to participate. Because of this likelihood for self-selection, the approach of this analysis has not only been to count how many respondents held a certain view but also to include thematic analysis of the additional comments provided to understand the range of key issues raised by respondents, differences in views and the reasons for them holding their view.
To process and summarise all the ideas submitted in the open-text responses, inductive (open) coding was used, whereby themes were developed as they arose directly from the responses. Open coding involved reading each response line-by-line and capturing the points covered. The approach assigned the same level of specificity and importance to each point raised. In each section of this report, the most common views have been summarised, reflecting where the views of respondent types were similar or differed. This summary of responses is not an exhaustive list of all ideas provided by respondents but summarises the most common concerns and opinions. Therefore, a range of qualitative terms are used, such as ‘many’, ‘some’, ‘most’ and ‘a few’. ‘Most’ refers to a majority, ‘many’ refers to when a substantial number of respondents have a similar view, ‘some’ refers to when there is a reasonable number of respondents with a similar view, and ‘a few’ refers to a small number of respondents.
Interpretation of the balance of opinion must be taken in the context of the question asked, as not every respondent answered all the questions, and not every respondent who provided an answer to a closed question provided additional detail. In this respect, qualitative terms are only indicative of relative opinions to questions based on who responded. Therefore, they cannot be assumed to relate numerically back to the total number of respondents.
Summary of next steps
We have heard and understood the concerns raised by those that responded to this consultation, and which are summarised in this document. The UK government will commence work developing draft regulations for fresh produce contracts, using the regulation making power in section 29 of the Agriculture Act 2020. To do this, we will work with industry as we develop these regulations.
These regulations will propose that written agreements are used between all producers and their buyers. We will work closely with industry to explore the details and provisions that should be mandatory or prohibited as part of these agreements.
About the respondents
1. Would you like your response to be confidential? If yes, please give your reason.
| Response | Count |
|---|---|
| Yes | 57 (49%) |
| No | 60 (51%) |
There were almost equal numbers of ‘Yes’ and ‘No’ answers to this question, with slightly more answering ‘No’, that they didn’t want their response to be kept confidential. Many who answered ‘Yes’ did not give a reason why, but the most common reason provided was fear of retaliation from suppliers and other commercial partners. The other significant reason stated by many was commercial sensitivity given the information provided.
5. What type of business do you operate as? Please select all that apply.
| Response | Count |
|---|---|
| Producer or grower | 97 (83%) |
| Packer | 43 (37%) |
| Marketing agent | 16 (14%) |
| Processor | 11 (9%) |
| Wholesaler | 6 (5%) |
| Retailer | 4 (3%) |
| Food service or hospitality business | 1 (1%) |
| Producer organisation | 11 (9%) |
| Co-operative | 3 (3%) |
| Representative organisation or trade association | 7 (6%) |
| Other | 3 (3%) |
| Prefer not to say | 2 (2%) |
Most respondents operate as a producer or grower, with about half of those also encompassing other business types, most commonly as a packer, marketing agent or processor. Respondents within the ‘Other’ category included consultants, consumers and researchers.
6. If you are a representative organisation, which part of the supply chain do you represent? Please select all that apply.
| Response | Count |
|---|---|
| Producer or grower | 56 (48%) |
| Packer | 20 (17%) |
| Processor | 7 (6%) |
| Retailer | 2 (2%) |
| Consumer | 1 (1%) |
| Other | 0 (0%) |
| Not applicable | 58 (50%) |
| Prefer not to say | 0 (0%) |
Some responses to this question came from those that did not identify themselves as representative organisations in question two, so we are showing in the table above only the responses from those that did. The table shows responses to this question from seven organisations.
Seven businesses that completed the Citizen Space survey identified themselves as representative organisations, with the majority of those representing producers. Many represented more than one group, with some representing packers, processors and retailers.
Of the businesses that emailed in responses, ten came from representative organisations or trade associations, and nearly all of those also represent producers or growers.
7. Where is your business based? Please select all that apply.
| Response | Count |
|---|---|
| England | 110 (94%) |
| Northern Ireland | 4 (3%) |
| Scotland | 17 (15%) |
| Wales | 7 (6%) |
| Other | 7 (6%) |
| Don’t know | 0 (0%) |
| Prefer not to say | 0 (0%) |
Most respondents had at least some of their business based in England. 10% of respondents had business in more than one part of the United Kingdom. A small number had some business based internationally, notably in Portugal, Spain, Italy, Ireland and Chile.
8. If you grow fresh produce, are you currently a member of a Producer Organisation?
| Response | Count |
|---|---|
| Yes | 56 (58%) |
| No | 40 (41%) |
| Not applicable | 1 (1%) |
Some responses to this question came from those that did not identify themselves as producers or growers in question 6, so we are showing in the chart above only results from the 97 responses from those that did.
Most responses from producers or growers answered they are currently a member of a producer organisation, while many also answered they are not.
9. If you grow fresh produce, are you currently a member of a cooperative business?
| Response | Count |
|---|---|
| Yes | 27 (28%) |
| No | 67 (69%) |
| Not applicable | 3 (3%) |
Some responses to this question came from those that did not identify themselves as producers or growers in question 6, so we are showing in the chart above only results from the 97 responses from those that did. Most responses from producers or growers answered they are currently not a member of a cooperative business, with many also answering they are.
10. If you sell fresh produce, what type of businesses do you sell to? Please select all that apply.
| Response | Count |
|---|---|
| Packer | 33 (28%) |
| Marketing agent | 44 (38%) |
| Processor | 45 (38%) |
| Wholesaler | 51 (44%) |
| Retailer | 67 (57%) |
| Food service or hospitality business | 25 (21%) |
| Producer organisation | 23 (20%) |
| Co-operative | 7 (6%) |
| Other (please specify) | 11 (9%) |
| Prefer not to say | 3 (3%) |
Most respondents sold fresh produce to retailers. Many also sold fresh produce to wholesalers, processors, and marketing agents. A small number of respondents noted that they sold directly to the public at the farm gate or via vegetable boxes. Retail was the most likely purchaser of fresh produce for all business types.
11. If you sell fresh produce, how many different businesses have you sold to in the past 12 months? Include the total for all crops you sell.
| Response | Count |
|---|---|
| 1 to 3 | 18 (15%) |
| 4 to 6 | 28 (24%) |
| 7 to 9 | 11 (9%) |
| 10 to 12 | 13 (11%) |
| More than 12 | 31 (26%) |
| Don’t know | 0 (0%) |
| Not applicable | 12 (10%) |
| Not answered | 4 (3%) |
Responses to this question indicate a wide range in the number of businesses different organisations have sold to in the past 12 months. The most common answer, indicated by many, that responded was More than 12. Many responses also answered 4 to 6 different businesses, with all other options being chosen by some. There was little variation in responses across most business types.
12. If you purchase fresh produce, what type of businesses do you purchase from? Please select all that apply.
| Response | Count |
|---|---|
| Producer or grower | 38 (32%) |
| Marketing agent | 13 (11%) |
| Producer organisation | 18 (15%) |
| Co-operative | 12 (10%) |
| Processor | 3 (3%) |
| Wholesaler | 7 (6%) |
| Other | 0 (0%) |
| Don’t know | 0 (0%) |
| Not applicable | 71 (61%) |
| Prefer not to say | 0 (0%) |
For those purchasing fresh produce and for whom the question was applicable, the majority report purchasing directly from producers or growers. Many also reported purchasing from marketing agents, producer organisations and co-operatives. Some respondents purchased fresh produce from wholesalers, and a few purchase from processors.
The responses varied depending on the type of business that was purchasing. Every retailer that responded reported purchasing from producers or growers, and the majority also reported purchasing from marketing agents, producer organisations, co-operatives, and wholesalers. Every response from processors, wholesalers and producer organisations state they purchase from producers; the vast majority of marketing groups report purchasing from producers or growers; and many packers stated they purchase from producers or growers.
13. If you purchase fresh produce, how many different businesses have you purchased from in the past 12 months? Include the total for all crops you purchase.
| Response | Count |
|---|---|
| 1 to 3 | 6 (5%) |
| 4 to 6 | 4 (3%) |
| 7 to 9 | 1 (1%) |
| 10 to 12 | 6 (5%) |
| More than 12 | 20 (17%) |
| Don’t know | 1 (1%) |
| Not applicable | 70 (60%) |
| Not answered | 9 (8%) |
The majority of responses to this question from those for whom it was applicable state they purchase from more than 12 different businesses, with all other bands chosen by some. The least common response was 7 to9, selected by only a small number of respondents.
Fresh produce crops
14. Which categories best describe the crops you produce, purchase or have an interest in? Please select all that apply.
The consultation saw responses from all listed crop types. The greatest number of responses came from those that produce or purchase soft fruit (‘strawberries and raspberries’), followed by ‘potatoes’, ‘alliums’, ‘brassicas’, ‘stone fruit’, ‘top fruit’ and ‘leafy salads.’ Of the listed categories, the fewest responses came from those that produce or purchase ‘mushrooms’, followed by ‘rhubarb’.
15. If you are a business that produces fresh produce, how much of each crop category do you produce annually? Please provide details on the annual production volume in tonnes, percentage of volume going to processing, and annual value of production in GBP, for each crop category you produce. For example: Potatoes: XX tonnes, XX% for processing, and £XX value.
We received many responses to this question detailing the different crops produced and the quantities measured in a range of different formats. Analysis of this question is used to provide supporting evidence and context to the responses given to other questions in the consultation.
16. If you are a business that purchases fresh produce, how much of each crop category do you purchase annually? Please provide details on the annual purchase volume in tonnes, percentage of produce purchased that is used for processing, if any, and annual purchase value in GBP, for each crop category you purchase. For example: Potatoes: XX tonnes, XX% for processing, and £XX value.
We received many responses to this question detailing the different crops produced and the quantities measured in a range of different formats. Analysis of this question is used to provide supporting evidence and context to the responses given to other questions in the consultation.
Type of contract
17. As a business that sells fresh produce, what type of contract do you have? Please select all that apply. Please provide details of what your current contract(s) look like.
| Response | Count |
|---|---|
| Written contract | 57 (49%) |
| Verbal contract | 39 (33%) |
| Informal email agreement | 46 (39%) |
| Forecast programme only | 53 (45%) |
| Other (please explain) | 8 (7%) |
| None | 5 (4%) |
| Don’t know | 1 (1%) |
| Not applicable | 11 (9%) |
The majority of applicable respondents reported having written contracts and forecast programmes, with many also reporting verbal contracts and informal email agreements. Of those answering ‘Other’, a few indicated they sell on the spot market or through ad-hoc sales. Most respondents referenced having more than one type of contract. Responses from Scotland, Wales and Northern Ireland were limited in number, and follow the same trend. However, responses from Wales had more informal email agreements and forecast programmes than written or verbal contracts.
‘Asparagus’ and ‘stone fruit’ were the crops most likely to be sold through forecast programmes. ‘Root vegetables’ and ‘summer squash’ were most likely to be sold through informal email agreements. ‘Winter squash’ was most likely to be sold through verbal contracts, and written contracts were most likely for those selling ‘mushrooms’ and ‘potatoes’.
Comments from some respondents highlighted that they felt the specific terms in their contracts were subject to change, particularly volumes. A few respondents highlighted that their actual agreements were negotiated and agreed too late in the season, once crops had already been planted.
Summarising the range of contracts in the sector, one representative organisation stated: “The horticultural sector in the UK is complex… Contractual agreements vary from informal email exchanges to formal written contracts with lengthy terms and conditions. Agreements can also be verbal, with no written commitment on volume or price to fixed or weekly pricing and seasonal supply arrangements.”
18. As a business that purchases fresh produce, what type of contract do you have? Please select all that apply. Please provide details of what your current contract(s) look like.
| Response | Count |
|---|---|
| Written contract | 21 (18%) |
| Verbal contract | 17 (15%) |
| Informal email agreement | 18 (15%) |
| Forecast programme only | 12 (10%) |
| Other (please explain) | 1 (1%) |
| None | 2 (2%) |
| Don’t know | 0 (0%) |
| Not applicable | 60 (51%) |
As with question 17, written contract was again the most common answer, but this time ‘forecast programme’ was answered least. A lower proportion of applicable responses from businesses that purchase fresh produce have verbal contracts compared to sellers of fresh produce.
Most respondents stated retailers were most likely to offer written contracts with those they purchase from. Most marketing agents, packers, processors, and wholesalers also report having written contracts.
19. “As a business that sells fresh produce, the terms and conditions agreed in my contract, whether written and signed or not, are specific and unambiguous” To what extent to do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 9 (8%) |
| Agree | 29 (25%) |
| Neither agree nor disagree | 12 (10%) |
| Disagree | 25 (21%) |
| Strongly disagree | 18 (15%) |
| Don’t know | 5 (4%) |
| Not applicable | 16 (14%) |
| Not answered | 3 (3%) |
Responses to this question indicated a mixed picture of views, with similar proportions of responses agreeing and disagreeing, and a smaller number neither agreeing nor disagreeing. A similar proportion of responses across different business types selling fresh produce was found in Wales. All respondents to this question in Northern Ireland (a much smaller sample size) strongly disagreed. Across the UK, the same mixed picture was seen in most crops. A majority of applicable respondents disagree or strongly disagree with the statement for some crops, including all ‘fruit’ and ‘salad’ categories, ‘mushrooms’, ‘potatoes’, and ‘root vegetables’.
Most respondents that disagreed referenced having vague clauses in contracts (particularly volumes) or no commitments on them. Some respondents that disagreed also stated purchasers held the power in negotiating and agreeing contracts and that ambiguous specifications led to produce being rejected or extra charges.
20. “As a business that purchases fresh produce, the terms and conditions agreed in my contract, whether written and signed or not, are specific and unambiguous”. To what extent to do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 10 (9%) |
| Agree | 13 (11%) |
| Neither agree nor disagree | 6 (5%) |
| Disagree | 4 (3%) |
| Strongly disagree | 3 (3%) |
| Don’t know | 1 (1%) |
| Not applicable | 62 (53%) |
| Not answered | 18 (15%) |
Most respondents purchasing fresh produce and for whom the question was applicable agreed with the statement. A similar proportion is also seen when looking at different business types purchasing fresh produce, and across England, Scotland, Wales and Northern Ireland and all crop types.
Comments came mainly from those agreeing with the statement. The most common reason why respondents agree was due to having positive relationships with their suppliers and transparency on specific contractual terms.
21. “As a business that sells fresh produce, the contracts I am currently entered in to or have agreed in the past 5 years, are considered binding by both parties”. To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 4 (3%) |
| Agree | 25 (21%) |
| Neither agree nor disagree | 13 (11%) |
| Disagree | 29 (25%) |
| Strongly disagree | 22 (19%) |
| Don’t know | 4 (3%) |
| Not applicable | 16 (14%) |
| Not answered | 4 (3%) |
The majority of responses from those selling fresh produce and for whom the question was applicable disagreed or strongly disagreed with this statement, while many other responses agreed, and some neither agreed nor disagreed. The same picture is visible when looking at the different business types selling fresh produce, but when looking at responses from Scotland, Wales and Northern Ireland we see the majority agree in each case (based on a small number of applicable responses).
Responses show greater variation when looking at different crops, though in most cases they disagreed. Applicable responses from those selling ‘potatoes’ and ‘alliums’ tended to agree, and responses from ‘root vegetables’ and ‘asparagus’ highlighted mixed views. Responses from ‘edible herbs’, ‘leafy salads’, and ‘protected salads’ were most likely to disagree.
There were few comments illustrating why people agreed or strongly agreed, and having good relationships with those they supply to was the most commonly referenced reason by those that did. There were more comments from respondents who disagreed or strongly disagreed. Most of the respondents who disagreed stated that aspects of their contracts were subject to variability, for example volumes that can be reduced from what was agreed or informally stated. A few responses stated that those selling felt an inability to negotiate terms, that unilateral changes were permitted and that weather was a key factor that resulted in contracts being changed.
One respondent summarised some of these issues with the following quote:
“Some retailer’s ‘forecasts’ agreements have no compensation for growers for under or overselling of product. The grower is left at risk and left to carry the cost of unsold product, or where there are oversales, suppliers have to take the first action to manage or resolve this with the retailer. There seems to be little recognition there is a limited supply when certain lines go well over forecast sales as well as low sales leaving unsold crop with the seller.”
While one representative organisation acknowledged the good practice that also exists in the supply chain to support growers, saying:
“There are some good examples which we can point to where retail supplier relationships have resulted in making supply chains leaner and more cost efficient, with some significant investment in innovations. Recent weather challenges have lead [a retailer] to offer three-year contracts to some of their root veg growers, giving growers more certainty to reinvest. Long term partnerships, like the recently announced £30m deal between one apple grower and [a retailer] allows for investment in new orchards, new technologies and season extension plants to support UK food security. We are also aware of a small number of contracts which embed and share the risks and costs of volatile inputs, like energy, as part of a price mechanism.”
22. “As a business that purchases fresh produce, the contracts I am currently entered in to or have agreed in the past 5 years, are considered binding by both parties”. To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 8 (7%) |
| Agree | 14 (12%) |
| Neither agree nor disagree | 5 (4%) |
| Disagree | 5 (4%) |
| Strongly disagree | 4 (3%) |
| Don’t know | 1 (1%) |
| Not applicable | 64 (55%) |
| Not answered | 16 (14%) |
Responses to this question contrast with those for its corresponding question for sellers, 21, above. Most of those that purchase fresh produce and for whom the question was applicable agreed or strongly agreed with this statement.
In comments, the most common theme from respondents that agreed or strongly agreed was the need for flexibility in contracts to deal with unexpected supply issues.
One fresh produce purchaser explained their view below: “Purchases of fresh produce are not contractually based but agreed on a season by season basis but the named growers have confidence that we can market some or all of their crop as required. The supply chain needs that flexibility to match market conditions.”
23. “To ensure a legal baseline across the whole sector, all sale agreements between producers and purchasers should be covered by a written contract.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 37 (32%) |
| Agree | 43 (37%) |
| Neither agree nor disagree | 16 (14%) |
| Disagree | 11 (9%) |
| Strongly disagree | 5 (4%) |
| Don’t know | 3 (3%) |
| Not applicable | 0 (0%) |
| Not answered | 2 (2%) |
The majority of responses to this question agreed or strongly agreed with the statement that all sale agreements between producers and purchasers should be covered by a written contract. A similar majority is seen when looking at all business types, regions of the UK, and those that purchase or sell different crops.
Comments helped understand the reasons for each view. Many respondents who agree or strongly agree stated that written contracts would provide protection and add transparency; making it clearer for both parties exactly what was agreed and providing proof of the agreement. Many respondents who selected disagree or strongly disagree stated that supply can be too unpredictable (owing to weather and other factors) and a flexible approach is needed, for example weekly/monthly market pricing. The need for flexibility was a common theme, and references were made to ensuring the contract supports transparency and protection. A few respondents noted the need to ensure contracts are enforceable.
Quotes from respondents explaining views that agree and disagree with the statement are copied below:
“Growers commit large amounts of capital investment to their crop and customers should commit to any agreed purchase formally, and on a timescale appropriate to the grower’s commitment timescale.”
“The risk and reward in growing fresh produce is not in balance, all the risk with weather, pests, disease and growing a perfect crop is with the supplier/grower. A written contract should exist to enable all parties to understand the terms of supply.”
“Written contracts can be an issue for both growers and packers/processers. For example, if we are unable to supply due to weather adversely affecting our crops or if a packer/processer is unable to order their programmed volumes due to a drop in demand from the end user (primarily Supermarkets). We have found that a joint understanding over the years has meant that neither party is adversely affected with financial penalties due to circumstances out of their control - for example, weather, end user demand etc.”
24. We are keen to understand whether changes to contracts between producers and purchasers take place and how they are made. Please select one option below that best reflects your recent experience. Please provide details related to the frequency of changes, the negotiations involved and who typically initiates and coordinates this process.
| Response | Count |
|---|---|
| Changes to contracts do not occur or are very uncommon | 12 (10%) |
| Changes to contracts sometimes occur | 55 (47%) |
| Changes to contracts occur frequently | 19 (16%) |
| Don’t know | 13 (11%) |
| Not applicable | 17 (15%) |
| Not answered | 1 (1%) |
Most of the responses from those that answered the question and for whom it was applicable stated that ‘changes to contracts sometimes occur’. Some responses also indicated that ‘changes to contracts do not occur or are very uncommon’, and some stated ‘changes to contracts occur frequently’.
Proportionally, more respondents from Wales and Northern Ireland selected a higher proportion of changes occurring frequently (based on a small number of applicable responses), as did responses from those that sell or purchase ‘edible herbs’, ‘protected salads’, and ‘top fruit’.
The most common reason given why contracts change was because the purchaser wanted it to and they dictate terms, with some of those respondents also saying they were given ‘take it or leave it’ offers. In addition, many responses stated contracts change in response to external pressures, such as weather or inflation, and in these cases the changes were put forward by both suppliers and purchasers.
The quotes below illustrate two examples of the impact of changes being made or not being made:
“In 2018 there was a very poor crop of onions and our customer (a large supermarket chain) did adjust the price twice in this season to help the grower base and to ensure supply for that season and the following 2 years. I know other Customers in the onion trade that did not help their growers at all and made them honour the contracts with no uplift in price whilst they had raised prices in their shops.”
“Contracts are typically for one year or sometimes 2 to 3 years. There is no allowance for adjustments for issues outside of our control for example major weather events, pest and disease issues. No specific commitments to volume, for example contract normally says x% of my volume of a sku… If we are short we have to buy at our own loss from the open market. If retailer sell more than expected we have to cover that cost. If retailer sells less than expected, we have the cost of dumping that crop and writing off the growing costs on that excess crop.”
While the question was framed around contracts held, many respondents highlighted they don’t have contracts and instead operate on programmes, and the quote below highlights how changes to these can apply:
“Our Programmes are reviewed and amended annually dependant on predicted demand from end user so that we generally are advised of the programme requirements from each customer in the first quarter of the year for the coming season. Through the season we then can be advised of changes to the programme volumes which is usually due to changes by the end user for example if a particular line is being delisted or if a promotion is being run on a particular line.”
25. As a business that sells fresh produce, where changes to contracts do take place, are these changes discussed prior to being made? Please provide details on notice periods and general timeframes.
| Response | Count |
|---|---|
| Yes | 57 (49%) |
| No | 25 (21%) |
| Don’t know | 9 (8%) |
| Not applicable | 21 (18%) |
| Not answered | 5 (4%) |
Most businesses who answered this question and for whom it was applicable stated that contract changes were discussed prior to being made. Many of these indicated that those discussions were full and fair, or reasonably so. A few respondents answering ‘Yes’ indicated that notice of any change to contracts was usually very short with little or no room to influence the decision.
Many responses answered ‘No’ to the question, many of which indicated there was no or very little opportunity to discuss the contract changes. A few that answered ‘No’ indicated that it was unpredictable whether contract changes would be discussed, and some added that these changes typically had a negative impact on their business. Processors and wholesalers were most likely to answer ‘No’, followed by packers and marketing agents.
26. As a business that purchases fresh produce, where changes to contracts do take place, are these changes discussed prior to being made? Please provide details on notice periods and general timeframes.
| Response | Count |
|---|---|
| Yes | 29 (25%) |
| No | 5 (4%) |
| Don’t know | 1 (1%) |
| Not applicable | 69 (59%) |
| Not answered | 13 (11%) |
The majority of businesses who answered this question and for whom it was applicable stated that contract changes were discussed prior to being made. A small number responded ‘No’, with little detail as to why.
Comparing the answers here to its corresponding question, 25, businesses selling fresh produce are less likely to have changes discussed beforehand when compared to businesses purchasing fresh produce.
27. As a business that sells fresh produce, where changes to contracts do take place, how are these changes made? Please select all that apply.
| Response | Count |
|---|---|
| In writing (and signed) | 26 (22%) |
| In writing (but not signed) | 43 (37%) |
| Verbally | 47 (40%) |
| Don’t know | 12 (10%) |
| Not applicable | 23 (20%) |
Some respondents stated multiple ways that changes are made to contracts. The most common reason, selected by half of those for whom this question was applicable, was changes are made ‘verbally’. Many also identified that changes are made ‘in writing (but not signed)’ and some selected changes were made ‘in writing (and signed)’.
There was little variation in the proportion of responses across the possible answers when looking at different business types and across England, Scotland, Wales and Northern Ireland. There was some variation in responses from those producing or selling different crops, for instance a higher proportion of verbal contracts for ‘leafy salads’ and ‘edible herbs’.
28. As a business that purchases fresh produce, where changes to contracts do take place, how are these changes made? Please select all that apply.
| Response | Percentage |
|---|---|
| In writing (and signed) | 16 (14%) |
| In writing (but not signed) | 15 (13%) |
| Verbally | 20 (17%) |
| Don’t know | 3 (3%) |
| Not applicable | 63 (54%) |
The proportional split of answers to this question from those for whom it was applicable were similar to corresponding question 27. The most common reason, stated by half of those for whom this question was applicable, was changes are made ‘verbally’. Many also identified that changes are made ‘in writing (but not signed)’ and some selected changes were made ‘in writing (and signed)’.
There was again little variation in the proportion of responses across the possible answers when looking at different business types and across England, Scotland, Wales and Northern Ireland. There was more variation across the different crops, partially driven by smaller sample sizes for each category when considering those purchasing fresh produce where most of the responses overall were not applicable.
29. As a business that sells fresh produce, what contract durations have you agreed to in the past 5 years? Please select all that apply.
| Response | Count |
|---|---|
| Fixed term – single growing season | 74 (63%) |
| Fixed term – more than one growing season | 27 (23%) |
| Rolling with end date, renegotiation at specified intervals | 22 (19%) |
| Rolling without end date, renegotiation at specified intervals | 20 (17%) |
| Rolling without end date, no renegotiation | 7 (6%) |
| Other (please specify) | 7 (6%) |
| Not applicable | 20 (17%) |
Most respondents to this question selected that they had ‘fixed term – single growing season’ contracts. Some businesses also reported having fixed term contracts lasting for more than one growing season, as well as rolling contracts with renegotiation at specified intervals. Only a small number of responses indicated they had rolling contracts without an end date or renegotiation points (or ‘evergreen’ contracts). Some businesses reported having multiple types of contracts. A small number of responses that answered ‘Other’ explained they have informal arrangements only, with no specific terms on duration.
Processors were more likely to have rolling contracts with those they sell to than producers, packers, marketing agents or wholesalers. There was little variation in the proportion of responses for the possible answers when looking at different crops, but none dramatically differed from the overall picture. For instance, ‘top fruit (apples and pears)’ are an example of a long-term crop, but the majority of producers report having single growing season contracts.
30. As a business that purchases fresh produce, what contract durations have you agreed to in the past 5 years? Please select all that apply.
| Response | Count |
|---|---|
| Fixed term – single growing season | 28 (24%) |
| Fixed term – more than one growing season | 13 (11%) |
| Rolling with end date, renegotiation at specified intervals | 9 (8%) |
| Rolling without end date, renegotiation at specified intervals | 4 (3%) |
| Rolling without end date, no renegotiation | 3 (3%) |
| Other (please specify) | 1 (1%) |
| Not applicable | 68 (58%) |
As with contracts agreed by sellers (question 29), the majority of responses from those for whom it was applicable stated they had ‘fixed term – single growing season’ contracts, though this was a smaller majority than for those selling fresh produce in the equivalent question 29.
31. “As a business that sells fresh produce, the terms and conditions of my contract are always honoured.” To what extent to do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 4 (3%) |
| Agree | 22 (19%) |
| Neither agree nor disagree | 23 (20%) |
| Disagree | 32 (27%) |
| Strongly disagree | 10 (9%) |
| Don’t know | 6 (5%) |
| Not applicable | 20 (17%) |
| Not answered | 0 (0%) |
Responses to this question demonstrated a mixed picture as to whether businesses that sell fresh produce have the conditions of their contract honoured. A higher proportion disagree or strongly disagree compared to agree or strongly agree.
Many respondents who provided further comments and agreed with the statement wrote that the reason they agreed was because they have good business relationships. A few respondents also stated that issues are rare, and that they had flexibility built into their contracts. The detail given by those disagreeing with the statement was wide-ranging, but common to most answers was that volume commitments and forecasts were not met. Some responses included reference to power imbalances with their purchasers, not having contracts, and changes made to specifications.
An issue raised by some producers is that they operate without contracts, but use programmes:
“There will be changes in the year on volumes and price it is important to understand they are not firm contracts but flexible programmes.”
32. “As a business that purchases fresh produce, the terms and conditions of my contract are always honoured.” To what extent to do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 7 (6%) |
| Agree | 13 (11%) |
| Neither agree nor disagree | 7 (6%) |
| Disagree | 6 (5%) |
| Strongly disagree | 3 (3%) |
| Don’t know | 2 (2%) |
| Not applicable | 66 (56%) |
| Not answered | 13 (11%) |
The applicable responses show a somewhat mixed picture, though most responses either agreed or strongly agreed with the statement. A few respondents who disagreed or strongly disagreed with the statement that the terms and conditions of my contract are always honoured referenced the weather as a key factor.
Those in the middle of the supply chain (packers, marketing agents and processors), were more likely to answer agree/strongly agree to this question acting as a purchaser, than to the previous question (31) acting as a seller.
33. If you have experienced issues with terms and conditions in contracts not being honoured, such as late or reduced payments, changes to order volumes or specifications, or force majeure. Please provide details around which terms and conditions are generally not adhered to and any reasons why.
A range of answers were given in response to this question. The most common issue raised was receiving volumes of orders that did not match initial programmes or expectations. Some respondents also identified late payments, beyond agreed terms, and changing specifications as examples of terms that were not honoured. A few respondents also identified a range of other terms, including unwarranted rejections, issues with promotions, extra charges, and force majeure.
The two main reasons identified by respondents for why these occur were having vague terms within their contracts, and issues resulting from the delivery processes (for example, drop and drive).
Contents of contract
34. “As a business that sells fresh produce, the contracts I am currently entered in to or have agreed in the past 5 years, appropriately reflect my business needs”. To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 2 (2%) |
| Agree | 24 (21%) |
| Neither agree nor disagree | 14 (12%) |
| Disagree | 35 (30%) |
| Strongly disagree | 18 (15%) |
| Don’t know | 4 (3%) |
| Not applicable | 18 (15%) |
| Not answered | 2 (2%) |
The majority of respondents disagreed or strongly disagreed with this statement, some respondents agreed, and some neither agreed nor disagreed. A similar distribution of answers is reflected for all individual business types.
Responses from those that sell different crop types presented a more mixed picture. Most respondents that sell ‘mushrooms’, ‘leafy salads’, ‘vining peas, green beans, and sweet corn’, ‘summer squash’, ‘winter squash’, and all fruit categories disagree or strongly disagree with the statement. Whereas many respondents that sell ‘alliums’, ‘asparagus’, ‘brassicas’, ‘root vegetables’, ‘potatoes’ and ‘edible herbs’ either disagree or strongly agree with the statement.
A few respondents who agreed or strongly agreed provided additional comments, including that it is advisable to have flexible agreements which work for them, contracts were negotiated to suit both parties, and having good relationships with those they sell to underpinned their agreements.
Of those who disagreed and strongly disagreed and provided additional comments, most stated that prices are issues (for example the price paid was too low, did not allow for inflation and promotions were forced). Many responses were themed around not having long term contracts that provide security and an opportunity to invest and having no bargaining power when negotiating their contracts. Some responses contained information around not receiving clear terms relating to supply dates and volumes, agreements being negotiated after growing or purchasing decisions had to be made, and a lack of risk sharing for issues such as weather impacting production.
The quote below illustrates some of the challenges:
“Current timings for agreeing/confirming programmes by retailers tend to be shortly before cropping starts and long after the crop has actually been planted leaving growers in a very weak position when negotiating as they often have no effective option other than to agree the price offered, whether it covers their costs or not”.
35. “As a business that purchases fresh produce, the contracts I am currently entered in to or have agreed in the past 5 years, appropriately reflect my business needs”. To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 5 (4%) |
| Agree | 17 (15%) |
| Neither agree nor disagree | 4 (3%) |
| Disagree | 8 (7%) |
| Strongly disagree | 2 (2%) |
| Don’t know | 0 (0%) |
| Not applicable | 66 (56%) |
| Not answered | 15 (13%) |
In contrast to its corresponding question, 34, the majority of applicable responses from purchasers agreed or strongly agreed with the statement. This majority is reflected in responses from those purchasing different crops, from different parts of the UK, and for most different business types, including: packers, marketing agents, processors and wholesalers. Responses from retailers (based on a small sample size) show a more mixed picture, with equal numbers agreeing and disagreeing.
There were fewer comments in response to this question than compared with question 34. A few respondents provided reasons for agreeing, which included understanding grower challenges, supporting resilience in the supply chain, and that they have learned who they are able to collaborate with based on experience. Reasons for disagreeing provided by a few respondents included prices are too low and leave little room for profit, needing different length contracts for each crop, changes often need to be made in response to weather and other factors, and that small growers lack resources to manage complex processes.
“The issue is that small growers are not appropriately resourced to manage a complex and fast-moving supply chain. They rely on marketeers to manage that for them. Our model is excellent and serves growers well in my opinion.”
36. “As a business that sells fresh produce, I feel empowered to negotiate terms and conditions in contracts to best suit my business needs.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 6 (5%) |
| Agree | 19 (16%) |
| Neither agree nor disagree | 14 (12%) |
| Disagree | 27 (23%) |
| Strongly disagree | 30 (26%) |
| Don’t know | 2 (2%) |
| Not applicable | 17 (15%) |
| Not answered | 2 (2%) |
The majority of applicable respondents to this question disagreed or strongly disagreed with the statement. The same distribution was reflected for almost all business types (producers or growers, packers, marketing agents, processors, wholesalers, retailers and co-operatives) while responses from food service or hospitality businesses and producer organisations showed a more mixed picture. The majority of respondents from England, Scotland and Wales disagreed or strongly disagreed with this statement, while respondents from Northern Ireland showed a mixed picture.
Responses showed a more mixed picture when looking at those selling different crops. The majority of respondents selling ‘asparagus’ and ‘protected salads’ agreed with the statement, respondents selling ‘brassicas’, ‘root vegetables’, ‘potatoes’, ‘edible herbs’, ‘leafy salads, celery and watercress’, ‘soft fruit’, ‘stone fruit’ and ‘top fruit’ disagreed with the statement. Responses from those selling the remaining crops (‘mushrooms’, ‘vining peas, green beans and sweetcorn’, ‘summer squash’, ‘winter squash’ and ‘rhubarb’) showed a more mixed picture with no clear majority.
For those agreeing, most provided details about being able to balance opportunity with challenges within unique selling environments, and a few noted that despite their agreement it can be difficult to achieve terms and conditions that suit their needs.
Most additional comments from those who disagreed referred to a power imbalance or challenges in negotiating prices. A few respondents stated reasons such as pricing being the dominant feature in contracts with retailers, the late timing of negotiations once decisions on planting or purchasing are made, the lack of alternative buyers for produce besides retailers, and the dependency on maintaining good relationships.
37. “As a business that purchases fresh produce, I feel empowered to negotiate terms and conditions in contracts to best suit my business needs.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 4 (3%) |
| Agree | 18 (15%) |
| Neither agree nor disagree | 6 (5%) |
| Disagree | 5 (4%) |
| Strongly disagree | 3 (3%) |
| Don’t know | 0 (0%) |
| Not applicable | 64 (55%) |
| Not answered | 17 (15%) |
In contrast to its corresponding question, 36, the majority of applicable respondents to this question purchasing fresh produce agreed or strongly agreed with the statement, with some respondents disagreeing and some neither agreeing nor disagreeing. A similar picture is reflected across different business types. We see a majority of applicable respondents agreeing when looking just at packers, marketing agents, wholesalers, and retailers. The majority of applicable respondents from England, Scotland and Wales agreed, with Northern Ireland showing equal numbers agreeing and disagreeing. Across the UK, the majority of applicable respondents purchasing all crop types, agreed or strongly agreed, except for those purchasing ‘stone fruit’ where equal numbers agreed and disagreed.
Supporting reasons for agreeing with the statement included wanting to support growers or a fair approach, and a few examples where producers were purchasing from other growers and understood the challenges. Most respondents who disagreed or strongly disagreed and provided additional comments referenced being impacted by downstream contracts with those they supply to. A few comments from respondents that neither agreed nor disagreed highlighted that they recognised that growers are the party that carries more risk.
38. “All contracts should follow a set structure and include reference to the same type of terms and conditions.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 14 (12%) |
| Agree | 41 (35%) |
| Neither agree nor disagree | 23 (20%) |
| Disagree | 20 (17%) |
| Strongly disagree | 8 (7%) |
| Don’t know | 7 (6%) |
| Not applicable | 0 (0%) |
| Not answered | 4 (3%) |
Many respondents agreed or strongly agreed with the statement, with some other responses neither agreeing nor disagreeing and some disagreeing or strongly disagreeing.
This distribution of views varied a little when considering respondents from different business types, that operate in different parts of the UK, or produce, purchase or sell different crops. The majority of respondents that are packers, processors, wholesalers, and retailers agreed; many producers or growers and marketing agents did as well. The majority of respondents from Scotland and Wales agreed, the majority from Northern Ireland disagreed, and England showed a more mixed picture with many agreeing. The majority of those producing, purchasing or selling most crops agreed, apart from ‘root vegetables’, ‘potatoes’, and ‘top fruit’ where we still see many agree but not a majority.
Among the respondents that agreed or strongly agreed and provided additional comments, most said that such contracts could bring more fairness to the supply chain and provide a level playing field. Respondents that agreed or strongly agreed also acknowledged the need for sector-specific terms while advocating for a universal structure, and many respondents identified this would provide protection for suppliers.
Of the respondents that disagreed or strongly disagreed with the statement, most stated that such an approach would not allow for flexibility in arrangements, which was also raised by some respondents that agreed, with one respondent writing:
“Everything following a similar structure and similar topics, as long as the detail can be variable and negotiable. So standardised in approach but not in the individual detail.”
39. “Legislation, rather than a voluntary approach, is needed to ensure that a set contract structure is consistent across the supply chain.” To what extent do you agree or disagree with this statement?” Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 31 (26%) |
| Agree | 41 (35%) |
| Neither agree nor disagree | 26 (22%) |
| Disagree | 7 (6%) |
| Strongly disagree | 7 (6%) |
| Don’t know | 5 (4%) |
| Not applicable | 0 (0%) |
| Not answered | 0 (0%) |
Most respondents agreed or strongly agreed on the need for legislation. The majority of respondents that were producers, packers, marketing agents, processors, wholesalers and members of co-operatives agreed, whereas retailers, food service/hospitality businesses and members of producer organisations had more mixed views with no clear majority. When looking at single crops we see in most cases the majority of respondents agreed, with only respondents producing, purchasing or selling ‘alliums’, ‘protected salads’ and ‘top fruit’ demonstrating mixed responses (though in each case many still agreed).
Many of those that agreed with the statement said that a voluntary approach would be too weak to work, and previous attempts had struggled, which the NFU explains below:
“In 2013, the NFU launched the Fruit & Veg Pledge and called on the retail sector to voluntarily sign up to its principles. This voluntary pledge set out expectations of buyers that, if complied with by signatories, would bring balance and fairness into supply agreements. To date, only 48% of the grocery market has agreed to these principles. However, as it is a voluntary industry designed initiative, there is little way of encouraging retailers to sign or holding signatories to account.”
Of those that did agree with a legislative approach, a few raised concerns about the cost of enforcement, particularly for the smallest growers.
For those that disagreed, many stated that a voluntary protocol can work and many expressed concern that there can be no single solution to the problem and flexibility is essential. A representative organisation expanded on this latter point, stating:
“Most members within the association will utilise a combination of bespoke contracts, standards supply contracts and, where necessary due to purchasing on the ‘free-buy’ market, may employ one off contracts which are completed often within the same day.”
40. If you sell fresh produce, what types of terms and conditions are included in your contract? Please select all that apply.
| Response | Count |
|---|---|
| Sales price | 76 (65%) |
| Payment terms | 78 (67%) |
| Forecasted order volumes | 60 (51%) |
| Product specifications | 76 (65%) |
| Bonuses and deductions | 24 (21%) |
| Notice period | 40 (34%) |
| Force majeure | 42 (36%) |
| Other (please explain) | 9 (8%) |
| Don’t know | 5 (4%) |
| Not applicable | 19 (16%) |
Most respondents to this question stated they had at least one of the following four terms and conditions in their contracts: sales price, payment terms, forecasted order volumes and product specifications. Many respondents to this question stated they had force majeure and notice periods, and some respondents stated they had bonuses and deductions within their contracts.
Under ‘Other’ a few responses stated they have no formal contracts and a few raised assurance requirements, delivery methods, and inflationary mechanisms.
40. If you purchase fresh produce, what types of terms and conditions are included in your contract? Please select all that apply.
| Response | Count |
|---|---|
| Sales price | 27 (23%) |
| Payment terms | 29 (25%) |
| Forecasted order volumes | 26 (22%) |
| Product specifications | 28 (24%) |
| Bonuses and deductions | 12 (10%) |
| Notice period | 12 (10%) |
| Force majeure | 12 (10%) |
| Other (please explain) | 3 (3%) |
| Don’t know | 0 (0%) |
| Not applicable | 69 (59%) |
The distribution of responses for those that purchase fresh produce is similar to its corresponding question, 40, though a much higher proportion overall were not applicable.
Most respondents to this question stated they had at least one of the following four terms and conditions in their contracts: sales price, payment terms, forecasted order volumes and product specifications. Some respondents to this question stated they had at least one of the following terms and conditions in their contracts: force majeure; notice period; and bonuses and deductions.
Under ‘Other’ a small number of responses stated they have assurance requirements in their contracts.
42. Are there any clauses which should be mandatory within any contract? If yes, please provide details, including any specific clauses.
| Response | Count |
|---|---|
| Yes | 63 (54%) |
| No | 10 (9%) |
| Don’t know | 41 (35%) |
| Not applicable | 0 (0%) |
| Not answered | 3 (3%) |
Most respondents selected that contracts should have mandatory clauses, many selected ‘Don’t know’; and a few selected that contracts should not have any mandatory clauses. Most of the retailers that answered this question answered ‘No’. Those that produce or purchase ‘brassicas’ and ‘leafy salads’ were most likely to answer ‘Yes’. Those that produce or purchase ‘rhubarb’ were least likely to answer ‘Yes’, with the majority selecting ‘Don’t know’.
A range of specific clauses were raised by most of those that answered this question. Most responses about the clauses that should be mandatory were themed around prices, volumes and payment terms. Some respondents raised other clauses such as clear specifications, notice periods, force majeure and for longer term contracts clauses that allow pricing to be amended in cases of inflation or rising production costs. A few responses also stated length of contracts, dispute resolution processes, bonuses and deductions, and timescales.
Concerns over the risks carried by producers were raised by some of those who stated mandatory clauses should apply for clear volumes, prices and specifications. A few responses highlighted examples of very delayed payments. Some respondents also raised the role weather has on production, and cited the need for clear force majeure clauses to deal with these issues.
43. Are there any clauses which should be prohibited within any contract? If yes, please provide details, including any specific clauses.
| Response | Count |
|---|---|
| Yes | 31 (26%) |
| No | 15 (13%) |
| Don’t know | 67 (57%) |
| Not applicable | 0 (0%) |
| Not answered | 4 (3%) |
Most respondents didn’t know whether any clauses should be prohibited within contracts. There was little variation across different business types and parts of the United Kingdom, though most of the responses from Wales answered ‘Yes’. Those producing ‘edible herbs’, ‘leafy salads, celery, and watercress’,’ mushrooms’, ‘protected salads’ and ‘brassicas’ were most likely to answer ’Yes’, while those producing ‘root vegetables’ were most likely to answer ‘No’.
There were fewer details provided by respondents than the previous question relating to mandatory clauses, though a range of different clauses were proposed. Of these, many responses referenced that growers shouldn’t be penalised via penalties or other methods as a result of poor weather conditions:
“Primary producers should never be penalised for events out of their control. for example, a hail storm. Otherwise they are paying twice.”
Some comments also raised indicative volumes as a key issue, consistent with the call for clear volumes from the previous question. A few respondents also raised unilateral changes, rebates, funding promotions and the prevention of produce being sold onwards as loss leaders.
44. Should one party be permitted to make changes to a contract without the agreement of the other?
| Response | Count |
|---|---|
| Yes | 1 (1%) |
| No | 108 (92%) |
| Don’t know | 7 (6%) |
| Not applicable | 0 (0%) |
| Not Answered | 1 (1%) |
A significant majority of respondents answered ‘No’ to this question, believing that one party should not be permitted to make unilateral changes to a contract without the agreement of the other. A small number of responses were unsure, and one respondent answered ’Yes’. When looking at responses from different business types, parts of the UK, or those that produce or purchase different crops we see in every instance the same significant majority believing unilateral changes should not be permitted.
45. If yes, we are keen to hear your views as to what unilateral changes should be permissible, under what circumstances and the process by which contracts should be changed. Please provide detail in your answer.
The one response that believes unilateral changes should be allowed referenced this could be in response to cessation of supply or volume changes from crop failures or change in demand, as well as price changes due to increased costs of supply.
Some of these issues were raised in response to question 42 about mandatory clauses, where respondents cited force majeure and renegotiation points to tackle these issues.
46. As a producer, are you required to produce to any specific standards or through specific methods (such as through assurance schemes) that make it harder to find alternative purchasers for fresh produce, or increase the costs of doing so? Please provide detail in your answer.
Many respondents stated they produced to Red Tractor and LEAF standards. Many responses also highlighted that they were subject to different retailer-specific schemes or audits, BRC audits, and that some have to produce specific varieties of crops or to specific specifications. A few respondents also highlighted a range of other assurance schemes, including: Soil Association, Field to Fork, Sedex, Grasp, Nurture, Farm Assured, GLOBALG.A.P., EurepGap and Employees Tax Instalment Scheme.
Most of those that provided details of specific assurance schemes listed multiple different ones they were assured with. One producer stated they have “about 12 different audits for UK retailers, most of which overlap 95% of the questions”.
Many of those that provided details on the impact of these assurance schemes referenced that the cost and time it takes to meet the different standards were too high, and it was putting farmers off the industry.
“Multiple audits checking the same range of parameters, all specific to individual retailers add hugely to growers costs for no purpose if they supply or want to supply several customers.”
Some respondents suggested agreeing and aligning standards across all of fresh produce or specific crops, resulting in a single assurance scheme.
Similarly, a few producers referenced that carbon audits and reporting on Net-Zero is something that will likely grow and have a big impact on producers. Another referenced a request from a retailer on biodiversity and the contribution the retailer was willing to make:
“One retailer wants 5 to 10% of our farm to be set aside to biodiversity - a fantastic aim - but they have ZERO understanding of the financial implications and are not prepared to pay more for our produce to achieve this goal. Primary producers are always left to absorb costs such as these, and retailers are excellent at ignoring them.”
47. If you sell fresh produce, what type of pricing mechanism appears within your contract(s). Please select all that apply.
| Response | Count |
|---|---|
| Fixed price | 67 (57%) |
| Variable price | 36 (31%) |
| Input-tracker price | 5 (4%) |
| Tender process | 54 (46%) |
| Other (please explain) | 4 (3%) |
| Don’t know | 3 (3%) |
| Not applicable | 18 (15%) |
Most of those for whom the question was applicable stated fixed prices or the tender process as the pricing mechanism for selling their produce. Many others referenced having variable pricing in place. A few respondents referenced having prices that tracked input costs. A few respondents reported having other mechanisms, and most of those referenced either not having contracts or having only indicative prices.
Fixed costs was the most common pricing mechanism for most crops, except for ‘soft fruit’, ‘stone fruit’, ‘asparagus’, and ‘mushrooms’ where the tender process was most common.
Those producing ‘root vegetables’ were most likely to have contracts that tracked input costs. However, for most other crops no respondents referenced having contracts that tracked input costs.
Some respondents with fixed price contracts indicated they had some built-in flexibility to account for unanticipated costs or surplus production.
48. If you purchase fresh produce, what type of pricing mechanism appears within your contract(s). Please select all that apply.
| Response | Count |
|---|---|
| Fixed price | 27 (23%) |
| Variable price | 16 (14%) |
| Input-tracker price | 7 (6%) |
| Tender process | 6 (5%) |
| Other (please explain) | 2 (2%) |
| Don’t know | 0 (0%) |
| Not applicable | 69 (59%) |
Most applicable responses stated having fixed prices and many reported having variable prices. Some respondents referenced using the tender process to set prices, contrasting with the findings in the previous question from those selling fresh produce. Compared to question 47, a greater proportion of those purchasing fresh produce selected they have input-tracker prices.
49. “I feel the tender process is a fair way of agreeing price in the fresh produce sector” To what extent do you agree or disagree with this statement? Please give reasons for your answer, including the timing of processes and resource involved.
| Response | Count |
|---|---|
| Strongly agree | 0 (0%) |
| Agree | 8 (7%) |
| Neither agree nor disagree | 24 (21%) |
| Disagree | 26 (22%) |
| Strongly disagree | 38 (32%) |
| Don’t know | 6 (5%) |
| Not applicable | 15 (13%) |
| Not answered | 0 (0%) |
Most respondents disagreed or strongly disagreed that the tender process is a fair way of agreeing price in the fresh produce sector, and only a small proportion agreed. Retailers were the most likely type of business to agree, with half of those that answered this question agreeing. Meanwhile, most producers, marketing agents, packers and processors disagreed or strongly disagreed.
Responses from across the UK tended to share a similar distribution, except in Wales where an equal number of responses agreed and disagreed (based on small sample size). Looking across those that produce or sell different crops, most responses disagreed for all except for ‘protected salads’ where equal numbers agreed and disagreed.
Of those who agreed or strongly agreed with the statement, most said that the tender process creates a competitive market. Of those who disagreed or strongly disagreed, many stated that the tender process creates “a race to the bottom” on pricing, with other factors (such as quality of produce) given less importance. Some responses included that the annual nature of the tender process made it more difficult to justify longer-term investments, and that the timing of the tender process is not aligned with when producers are making decisions on their crop.
50. “Where contracts with variable pricing are entered into, the final price given for fresh produce and the reasons for that price are clear and unambiguous at the point of sale.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 2 (2%) |
| Agree | 20 (17%) |
| Neither agree nor disagree | 12 (10%) |
| Disagree | 15 (13%) |
| Strongly disagree | 11 (9%) |
| Don’t know | 16 (13%) |
| Not applicable | 38 (32%) |
| Not answered | 3 (3%) |
Many applicable respondents selected either ‘Don’t know’ or ‘neither agree nor disagree’. Many others disagreed or strongly disagreed that the final price and the reasons for that price are clear and unambiguous in contracts with variable pricing, while some respondents agreed or strongly agreed.
Like the tender process (question 49), retailers were most likely to agree or strongly agree. In contrast, no responses from producer organisations or cooperatives agreed or strongly agreed with this statement. Responses from Wales Scotland and Northern Ireland were more likely to agree than disagree (based on small sample sizes), in contrast to England where we see a mixed picture similar to the overall distribution.
The distribution of responses varies when looking at different crops. Most respondents that produce, purchase or sell ‘alliums’, ‘brassicas’, ‘potatoes’, ‘mushrooms’, ‘edible herbs’, ‘leafy salads, celery and watercress’, ‘summer squash’, ‘winter squash’, and ‘protected salads’ agreed or strongly agreed with the statement. Whereas there were mixed results for respondents that produce, purchase or sell ‘asparagus’, ‘root vegetables’, ‘vining peas, green beans and sweetcorn’, ‘rhubarb’, ‘soft fruit’, ‘stone fruit’ and ‘top fruit’.
Of the respondents who agreed or strongly agreed, reasons provided were having terms agreed as per the schedules, that there are better relationships when parties communicate, and prices should be agreed in advance of goods being ordered. Many responses who disagreed or strongly disagreed said that prices had too many variables and there is a lack of transparency or reasoning. Some responses were along the theme of pricing reflecting market conditions regardless of what is agreed.
Specifications, bonuses and deductions
51. “Crop specifications are clearly agreed between producer and purchaser at the beginning of the contract.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 21 (18%) |
| Agree | 54 (46%) |
| Neither agree nor disagree | 10 (9%) |
| Disagree | 12 (10%) |
| Strongly disagree | 6 (5%) |
| Don’t know | 4 (3%) |
| Not applicable | 9 (8%) |
| Not Answered | 1 (1%) |
The majority of respondents agreed or strongly agreed that crop specifications are clearly agreed between producer and purchaser at the beginning of the contract. The same majority was seen across applicable respondents that produce, purchase or sell all crop types and all parts of the UK. The majority of most business types also agreed or strongly agreed with the statement, however the majority of marketing agents disagreed or strongly disagreed with the statement.
Of the respondents who agreed or strongly agreed and provided comments, some said that the crop specifications are clearly outlined, necessarily adaptable and easy to understand and realistic. Of the respondents who disagreed or strongly disagreed and provided comments, some reasoned that specifications are subject to change, subjective, and are dictated and not open for negotiation, A few respondents noted that price takes precedence when cheaper alternatives are available, and that they’re impacted by seasonality and weather.
52. “Changes to specifications are agreed by both parties.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 12 (10%) |
| Agree | 46 (39%) |
| Neither agree nor disagree | 15 (13%) |
| Disagree | 21 (18%) |
| Strongly disagree | 11 (9%) |
| Don’t know | 4 (3%) |
| Not applicable | 6 (5%) |
| Not Answered | 2 (2%) |
Many respondents agreed with the statement; that changes to specifications are agreed by both parties. Some respondents disagreed with the statements, and some respondents neither agreed nor disagreed or didn’t know.
Most applicable respondents to this question from different business types agreed or strongly agreed with the statement; most marketing agents and co-operatives disagreed or strongly disagreed, and the one food service/hospitality business answered neither agree nor disagree. Most applicable respondents representing different crops also agreed or strongly agreed, with only respondents producing, purchasing or selling ‘mushrooms’, ‘stone fruit’ and ‘top fruit’ showing mixed views with no clear majority.
Most respondents who agreed or strongly agreed and provided a reason mentioned that specifications can be negotiated between both parties. A few responses also indicated changes to specifications aren’t needed. Most respondents who disagreed or strongly disagreed mentioned that buyers impose changes unilaterally, with some highlighting buyers hold the power in negotiations and that changes can be frequent.
53. “As a business that sells fresh produce, changes to specifications are generally agreed with sufficient notice to amend production, processing, packing or onward sale plans.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 9 (8%) |
| Agree | 27 (23%) |
| Neither agree nor disagree | 18 (15%) |
| Disagree | 23 (20%) |
| Strongly disagree | 17 (15%) |
| Don’t know | 3 (3%) |
| Not applicable | 18 (15%) |
| Not Answered | 2 (2%) |
As shown, there is a range of views from businesses selling fresh produce as to whether changes to specifications are agreed with sufficient notice to amend production, processing, packing or onward sale plans.
Responses also varied when looking at different business types, areas of the UK, and different crops. Most processors and members of cooperatives agreed or strongly agreed with the statement, whilst the majority of marketing agents, wholesalers and the one retailer that answered the question disagreed or strongly disagreed with the statement. Whereas, for producers or growers, packers, food service and hospitality businesses, and members of producer organisations, we see more mixed results, with no majority agreeing or disagreeing.
The majority of respondents in Scotland agreed or strongly agreed with the statement, the majority of respondents in Wales and Northern Ireland disagreed or strongly disagreed (based on small sample sizes), and in England many agreed or strongly agreed and many disagreed or strongly disagreed.
When looking at those that produce, purchase or sell different crops, most applicable respondents for ‘root vegetables’, ‘protected salads’, and ‘vining peas, green beans, and sweetcorn’ agreed with the statement, and most applicable respondents for ‘rhubarb’, ‘soft fruit’, ‘stone fruit’ and ‘top fruit’ disagreed. For those producing, purchasing or selling other crops we see more mixed responses with no clear majorities.
A few respondents said they agreed because they feel able to discuss issues, and that changes are rare or made with enough notice to amend plans. Many respondents that disagreed referenced how requested changes do not align with growing timescales. A few respondents raised other issues, such as the impact of weather, buyers having the power in negotiations and changes to packaging.
54. “As a business that purchases fresh produce, changes to specifications are generally agreed with sufficient notice to amend production, processing, packing or onward sale plans.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 8 (7%) |
| Agree | 17 (15%) |
| Neither agree nor disagree | 7 (6%) |
| Disagree | 4 (3%) |
| Strongly disagree | 2 (2%) |
| Don’t know | 0 (0%) |
| Not applicable | 65 (56%) |
| Not answered | 14 (12%) |
Responses to this question provided a clearer view than the corresponding question 53. The majority of applicable respondents agreed or strongly agreed with the statement. Similar majorities were seen when looking at those purchasing all different crops. The majority of applicable respondents from most business types also agreed; the majority of applicable respondents from members of producer organisations disagreed, and for food service/hospitality and members of cooperatives there was no clear majority.
Reasons for agreeing with the statement included a couple of references to no changes being needed and changes being made following supplier requests, and a single comment referenced a flexible approach, checking regularly with their supplier. The most frequently stated reason for disagreeing, raised by a few respondents, was due to fluctuations in supply, with a couple of comments mentioning changes to specifications happening after cropping and how changes can only be confirmed once agreed further down the supply chain.
55. “The bonuses and deductions which can be applied to the sales price based on specifications are clear and unambiguous at the point of sale.” To what extent do you agree or disagree with this statement? Please give reasons for your answer, including any relevant examples.
| Response | Count |
|---|---|
| Strongly agree | 9 (8%) |
| Agree | 18 (15%) |
| Neither agree nor disagree | 17 (15%) |
| Disagree | 12 (10%) |
| Strongly disagree | 13 (11%) |
| Don’t know | 13 (11%) |
| Not applicable | 32 (27%) |
| Not Answered | 3 (3%) |
As shown, there is a range of views from respondents as to whether the bonuses and deductions which can be applied to sales prices based on specifications are clear and unambiguous at the point of sale.
Many applicable respondents agreed with the statement, many disagreed, and some remained neutral. The majority of applicable respondents from Scotland and Wales agreed with the statement, as did applicable respondents producing, purchasing or selling ‘alliums’, ‘root vegetables’, ‘potatoes’ and ‘protected salads’.
The reasons for agreeing included a few comments stating that details were clear in their contracts and there were a couple of respondents who stated they felt they had good transparency. In contrast, the main reason given by some of those disagreeing was that they felt they didn’t have good transparency over the bonuses and deductions or a rationale for them. A small number of respondents referenced other reasons, including producers feeling they couldn’t challenge decisions and bonuses and deductions being negotiable.
56. “As a business that sells fresh produce, there is a clear process for disputing deductions applied by the purchaser or product rejections.” To what extent do you agree or disagree with this statement? Please give reasons for your answer, including any relevant examples.
| Response | Count |
|---|---|
| Strongly agree | 6 (5%) |
| Agree | 18 (15%) |
| Neither agree nor disagree | 18 (15%) |
| Disagree | 22 (19%) |
| Strongly disagree | 19 (16%) |
| Don’t know | 4 (3%) |
| Not applicable | 27 (23%) |
| Not Answered | 3 (3%) |
As shown, there is a range of views from businesses selling fresh produce as to whether there is a clear process for disputing deductions applied by the purchaser or product rejections. Many respondents disagreed or strongly disagreed with the statement, but some agreed or strongly agreed and some neither agreed nor disagreed.
The majority of wholesalers agreed with the statement, while the majority of marketing agents, processors, retailers and members of producer organisations and cooperatives that answered the question disagreed. Responses from those producing, purchasing or selling different crops also varied, with the majority of those in the ‘mushroom’ sector agreeing, and those producing, purchasing or selling ‘root vegetables’, ‘potatoes’, ‘edible herbs’ and ‘protected salads’ disagreeing.
There were no reasons provided for agreeing. The predominant reason for disagreeing with the statement, raised by some respondents, was that producers have to take the impact of rejections. Other reasons why a few respondents disagreed included that they’re time consuming, risks to losing future business, and that it’s an informal process.
Data reporting and transparency
57. “Existing market reporting services in the fresh produce sector are appropriate and sufficient for my business needs.” To what extent do you agree or disagree with this statement? Please state relevant crop category or categories where applicable and give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 1 (1%) |
| Agree | 15 (13%) |
| Neither agree nor disagree | 30 (26%) |
| Disagree | 28 (24%) |
| Strongly disagree | 21 (18%) |
| Don’t know | 19 (16%) |
| Not applicable | 0 (0%) |
| Not answered | 3 (3%) |
As shown, there is a range of views from respondents as to whether existing market reporting services in the fresh produce sector are appropriate and sufficient for their business needs. Many respondents disagreed or strongly disagreed with the statement, while some agreed or strongly agreed and some neither agreed nor disagreed.
The majority of respondents from marketing agents, retailers and the one food service/hospitality respondent disagreed, while there were no clear majorities for the remaining business types. Responses from England were mixed, while the majority from Scotland, Wales and Northern Ireland disagreed. Responses from those relating to individual crops largely provided no majority, though most respondents that produce, purchase or sell ‘asparagus’, ‘root vegetables’, ‘edible herbs’ and ‘rhubarb’ disagreed with the statement.
There were two reasons for agreeing raised by some of the respondents, noting that some of the specific crop associations provide good data, and noting that Kantar provided some good data. The reasons for disagreeing raised by a few respondents included reference to ADHB’s previous data for the sector and comments that existing data is inaccurate, expensive or out date.
58. “Market reporting services provide a useful mechanism for improving transparency along the supply chain.” To what extent do you agree or disagree with this statement? Please give reasons for your answer.
| Response | Count |
|---|---|
| Strongly agree | 4 (3%) |
| Agree | 40 (34%) |
| Neither agree nor disagree | 26 (22%) |
| Disagree | 16 (14%) |
| Strongly disagree | 10 (9%) |
| Don’t know | 18 (15%) |
| Not applicable | 0 (0%) |
| Not answered | 3 (3%) |
As shown, there is a range of views from respondents as to whether market reporting services provide a useful mechanism for improving transparency along the supply chain. Many respondents agreed or strongly agreed with this statement, many neither agreed nor disagreed and some disagreed or strongly disagreed.
The majority of marketing agents, wholesalers, retailers and the one food service/hospitality respondent agreed, while the rest presented mixed views. Responses were mixed across all different crops, with the exception of ‘potatoes’ where a majority agreed. Responses from England were mixed, whereas the majority of respondents from Scotland, Wales and Northern Ireland agreed.
There were two reasons for agreeing raised by a few respondents; that data promotes transparency and fairness, and that it informs decision-making. Reasons for disagreeing raised by a few respondents included that data is too limited, inaccurate, and that it should be publicly available.
59. “Additional data points from the supply chain should be made available to the relevant UK authority.” To what extent do you agree or disagree with this statement? Please state relevant crop category or categories where applicable and give reasons for your answer and details on what data would be beneficial.
| Response | Count |
|---|---|
| Strongly agree | 13 (11%) |
| Agree | 45 (38%) |
| Neither agree nor disagree | 19 (16%) |
| Disagree | 8 (7%) |
| Strongly disagree | 2 (2%) |
| Don’t know | 28 (24%) |
| Not applicable | 0 (0%) |
| Not answered | 2 (2%) |
As shown, there is a range of views from respondents as to whether additional data points from the supply chain should be made available to the relevant UK authority. Many respondents agreed or disagreed with the statement, many neither agreed nor disagreed, and a small number of respondents disagreed or strongly disagreed with the statement.
The majority of producer or growers, packers, marketing agents, processors, wholesalers and the single food service/hospitality respondent agreed with the statement. The majority of respondents based in Scotland, Wales and Northern Ireland all agreed with the statement (based on small sample sizes), while in England many did but not a majority. A majority of respondents that produce, purchase or sell ‘alliums’, ‘brassicas’, ‘potatoes’ and ‘leafy salads’, ‘celery’ and ‘watercress’ agreed, whereas for the other crops we saw many agree but not a majority.
Despite the many views agreeing with this, there were not a lot of comments specifying what additional data would be beneficial. Small numbers of respondents identified data that showed the value received throughout the supply chain would be beneficial, as well as farmgate prices, sales and production volumes, and land used. The reasons provided by a few respondents who agreed included to support policy making and business planning. Reasons for disagreeing were fewer, but included a couple of comments identifying it would be a further burden on producers, that producer costs would accelerate a ‘race to the bottom’, and that there was already sufficient data.
Dispute resolution
60. Please provide your views on the most effective means of dispute resolution and the reasons for your answer.
There were a range of views in response to this question. The predominate view on the most effective means of dispute resolution was for independent arbitration or mediation. Some respondents also identified negotiation as a suitable means, and the existing Groceries Code Adjudicator (which a small number of responses also proposed changes to improve). Other comments from a small number of respondents included use of the courts or a legal route, providing more detail in contracts to prevent issues, and a new ombudsmen.
Reasons for the different views were varied, with the most common reason being that it would promote better relationships moving forwards. A few respondents referenced the risk of retaliation and high legal costs.
61. Should resolution procedures be binding or advisory?
| Response | Count |
|---|---|
| Binding | 38 (32%) |
| Advisory | 29 (25%) |
| Don’t know | 43 (37%) |
| Not answered | 7 (6%) |
Responses to this question were mixed, with ‘Don’t know’ being the most common answer, and many answering both binding and advisory. Excluding food service and hospitality (just a single respondent), processors were the most likely business type to answer ‘binding’ and retailers were the most likely to answer ‘advisory’. There was little variation in these responses when looking across England, Scotland, Wales and Northern Ireland and those in the different crop supply chains.
Impact on business and consumers
62. If new legislative requirements were to be introduced as a result of this consultation, are you aware of any positive or negative impacts to business that could arise? Please give reasons for your answer, including any additional annual costs or savings for your business, and specify whether positive or negative.
| Response | Count |
|---|---|
| Yes | 33 (28%) |
| No | 15 (13%) |
| Don’t know | 66 (56%) |
| Not applicable | 0 (0%) |
| Not answered | 3 (3%) |
The majority of respondents to this question answered ‘Don’t know’, while some answered ‘Yes’ and some answered ‘No’. There was little variation in these results across different crops and areas of the UK, and when looking at different business types only for marketing agents and wholesalers do we see a majority answer ‘Yes’.
The reasons some respondents agreed included it would provide better security and better transparency for business planning, with a small number of comments stating it would provide better protection from cost of production rises and reduce audit linked burdens. Reasons for disagreeing from some respondents included additional financial costs and it may add a new restrictive burden. A small number of respondents said regulations would favour larger businesses and would have a knock-on impact on supply.
63. Are you aware of any positive or negative impacts on consumers which could arise from the introduction of regulations in the fresh produce sector? Please state relevant crop category or categories and give reasons for your answer, including any expected impacts with regards to costs, choice, and transparency of production and processing standards.
| Response | Count |
|---|---|
| Yes | 43 (37%) |
| No | 26 (22%) |
| Don’t know | 44 (38%) |
| Not applicable | 0 (0%) |
| Not answered | 4 (3%) |
Many respondents answered ‘Don’t know’, many answered ‘Yes’, and some answered ‘No’. For packers and marketing agents, a majority of respondents answered ‘Yes’, the single food service/hospitality respondent answered ‘No’, whereas for all other business types there were mixed views. Views from England, Scotland, Wales and Northern Ireland provided mixed views with no clear majorities. A similar mixed picture emerged for specific crops.
Many respondents noted potential positive impacts, with improved food security and the increased availability of British food available as the most common reasons. Other positive reasons raised by some respondents included that it would result in more sustainable or efficient food, and that improved standards would lead to safer and better-quality produce for consumers.
The predominant potential negative impact on consumers stated by many that answered ‘Yes’ was that it would result in price increases. However, many respondents provided the caveat that these price increases could be short-term, while improvements to the sector would outweigh those increases in the long-term. Similarly, some respondents noted that prices would not necessarily increase, and that this would be dependent on whether retailers pass their increased costs onto consumers.
Variation within the UK
64. Are there any unique circumstances within any of the constituent nations that would mean a different legislative approach would need to be taken? Please give reasons for your answer.
| Response | Count |
|---|---|
| Yes | 11 (9%) |
| No | 29 (25%) |
| Don’t know | 76 (65%) |
| Not applicable | 0 (0%) |
| Not answered | 1 (1%) |
The majority of respondents to this question answered ‘Don’t know’, while some said ‘No’ and a small number answered ‘Yes’. There was little variation to this pattern for different business types and those in different supply chains for each crop. In England, Scotland and Wales we also saw the same trend, but for Northern Ireland half the respondents to this question answered ‘Yes’ (based on a small sample size).
There were a limited number of comments, but the main reason given by a few respondents that answered ‘No/ was that a level playing field across the UK is needed. A response emailed in by a representative organisation also noted that a lot of UK businesses grow crops in different parts of the UK, and so it would be necessary to avoid regulatory divergence.
There were several supporting reasons for those that answered ‘Yes’ that were raised by small numbers of respondents. These included geographical differences, different labour laws, different trading rules in Northern Ireland and different costs dependent on where businesses were located.
Other concerns
65. How much time do you estimate would be required to implement business changes necessary to comply with any new legislation? Please give reasons for your answer.
| Response | Count |
|---|---|
| Under 12 months | 24 (21%) |
| 13 to 24 months | 47 (40%) |
| 25 to 36 months | 9 (8%) |
| Other | 10 (9%) |
| Don’t know | 25 (21%) |
| Not answered | 2 (2%) |
As shown, there is a range of views from respondents as to how much time they estimate would be required to implement business changes necessary to comply with any new legislation. The most common answer raised by many respondents was that it would take between ‘13 and 24 months’ to implement any business changes in order to comply with new legislation. Some respondents answered ‘under 12 months’, a small number answered ‘25 to 36 months’, some answered ‘Don’t know’, and a small number answered ‘Other’. Most of those that answered ‘Other’ explained it was dependent on the legislation.
Most respondents who commented noted that the time to implement is dependent on the legislation, and so they could not give a clear estimate. Many respondents based their answer on their typical contract periods, which tend to be around 12 months, and similarly on the seasons of their crops.
66. If you sell fresh produce, we are keen to hear about any additional burdens, costs, or reporting obligations required by your purchaser or onward supply chain. Please include details on any additional requirements that you are contractually obliged to follow, and your views on the value these processes add to your business.
In response to this question, the biggest issue raised by many respondents was the challenges and costs associated with assurance schemes, food safety requirements, and follow-up audits. Some respondents expressed frustrations over the burdensome nature of these processes, citing extensive paperwork, costly certification schemes, and the lack of tangible benefits for growers. Other issues raised by some respondents included: sustainability related burdens (for example, targets and carbon reporting), specification requirements, labour costs and energy costs, packaging obligations, delivery and transport and pesticide reporting and approval.
The main reason some respondents provided to explain why these were burdens included the costs associated with complying with each, and the burdensome and time-consuming nature of doing so.
67. We are keen to hear your views on any other issues related to business relations in the fresh produce supply chain, or ways in which it can be improved. This may include, but is not limited to, views on the information and assumptions presented in this document as well as topics that have not been covered by this consultation. Please provide detail in your answer.
A wide range of views were given by respondents to this question. The most common response, raised by many respondents, and surfaced in response to previous questions, was about the challenge of low/no profitability for growers in this sector.
Other issues raised by some respondents to this question included how power imbalances between suppliers and purchasers (often retailers) result in unfair treatment and challenging commercial arrangements for producers. Some respondents also raised issues around competing with exports, including expectations to meet higher standards than imports and lower cost imports being preferred by purchasers. Some respondents raised concerns over the length of contracts, and that longer contracts are needed for longer-term crops and to allow investment to drive efficiencies. Some respondents also raised needing support from a range of sources to meet new environmental needs. Some respondents also raised the need for better risk sharing within the supply chain, stating that issues like the weather can have a big impact on production, but this risk is primarily carried by producers.
Other issues were raised by a small number of respondents, including better promotion nationally for fresh produce to raise demand and awareness of costs, earlier negotiations for produce to take place before producers make decisions on planting, retailers circumventing Groceries Supply Code of Practice (GSCOP) obligations through new intermediaries, the need for a dispute resolution process, more support needed for producers, faster payments needed from purchasers, the need for better data, and addressing audit burdens.
Next steps
We have heard and understood the concerns raised by those that responded to this consultation, and which are summarised in this document. The UK government will commence work developing draft regulations for fresh produce contracts, using the regulation making power in section 29 of the Agriculture Act 2020. To do this, we will work with industry as we develop these regulations.
These regulations will propose that written agreements are used between all producers and their buyers. We will work closely with industry to explore the details and provisions that should be mandatory or prohibited as part of these agreements, and the regulatory needs of individual fresh produce sub-sectors.
We will continue to engage with stakeholders and the Scottish Government, Welsh Government and the Northern Ireland Executive to ensure that legislation works for all parts of the UK and incorporate special provision for differing circumstances, if necessary.
We will work with industry to further explore the suggestions on data collection and publishing that came up in the consultation. We will continue to explore this with the Scottish Government, Welsh Government and the Northern Ireland Executive.
We will work with the Department for Business and Trade, and the Competition and Markets Authority on findings relating to the Grocery Code Adjudicator (GCA) and the Grocery Supply Code of Practice (GSCOP).
Annex 1: Types of responses
Online survey
Respondents were encouraged to submit an online response by completing an online survey hosted on Defra’s consultation website, Citizen Space. The online survey followed the questions asked in the consultation paper: featuring both closed (for example, tick box questions), and open questions (asking for respondents to detail their views or provide further evidence or examples). Respondents were able to answer as many or as few questions as they wanted. For the closed questions statistics are provided on the responses to each proposal. For open questions, a summary of the main themes emerging from the responses is provided within this response.
Email and post
Responses could be submitted directly by email or post. Some of these responses answered the consultation questions directly. Others provided a more general commentary on the use of contracts within the fresh produce sector. Where responses directly answered the specific consultation questions, these have been included in the data analysis of each question. Where responses provided additional general views on the use of contracts, we have reflected these in the general analysis of relevant question areas.
Organisational responses
Organisations and stakeholder groups were able to submit responses to the consultation on behalf of their members. As with the responses obtained via email and post, some of these responses followed the consultation format, while others provided general views on the role of possible legislation in the sector. The key arguments raised in these organisational responses are included alongside individual responses in each of the relevant sections. A list of organisations who submitted a response is included in Annex 3.