UK’s Organic Market Presents Opportunities For US
October 1, 2016 | 3 min to read
The United Kingdom’s produce industry expert, Laurence Olins, discusses the future of England’s produce industry post-Brexit and the future of trade in a President Trump world. Following is an excerpt from the interview, which appeared in Jim Prevor’s Perishable Pundit. You can read the interview in its entirety at perishablepundit.com.
Q: Many executives are anxious regarding the impacts of Brexit, amid uncertainties facing the industry. What is your assessment of the consequences and complexities of the U.K.’s vote to leave the EU?
A: I’m heavily involved in leading the industry on this issue vis a vie the government. I’ve had meetings with secretaries of state in the past few weeks. The one word that comes out is uncertainty, and no one is prepared to give answers going forward. Basically, our concerns are three-fold: labor, funding and trade with the EU.
Seasonal labor availability is critical. The berry industry alone employs 31,000 Eastern and Central Europeans on our farms, similar to the way you employ Mexicans and Central and South Americans in the United States. These are seasonal workers, so they come and stay nine to 10 months a year, they live on the farms, and 70 percent of them return every year.
Q: What percentage of your workforce is made up of these workers?
A: About 95 percent is seasonal European labor. Post-Brexit, that labor force is in jeopardy. We have free movement of labor as a member of the EU. With Brexit, that movement will be curtailed.
Q: What actions can you take to alleviate this problem?
A: We are lobbying for a visa/permit solution to pass border control, which allows us the same number and more, because our industry is growing. We will need 38,000 seasonal workers in five years’ time.
Q: That’s disconcerting.
A: For us, and a lot of other industries. The U.K. employs 4.5 million foreign-born workers, and we have less than 1.5 million unemployed. So it doesn’t take a genius to figure out if you don’t have any of those foreign workers, the economy will be absolutely, irrefutably damaged.
Q: The produce industry is dependent on that labor.
A: For the entire produce industry, we employ 75,000 seasonal workers; that’s all crops, for which berries are 31,000. Our prediction is by 2020, it will be 91,000 for all produce.
Q: What about other concerns funding and trade with the EU?
A: We receive about $60 million US a year from Europe; these are not food subsidies, but money going to capital projects, and it is matching funds for the fruit/vegetable industry. So $60 million US has to be propped up equivalently by the growers, but it can only be spent on capital projects, which are innovative. There has been a guarantee that those funds will continue until 2020.
The third issue, which is probably the biggest, is access and membership to the single market, which means we can trade within Europe, and with everyone that Europe has agreements with, and no paper work, no barriers, no customs, no frontiers, no duty, no nothing. We won’t be part of the single market. Importing fruit from other European countries will become difficult, and we won’t be able to have the speed of logistics and all the logistics sophistication we enjoy at the moment.
Q: Do you think people grasped the extent of the ensuing problems that could occur by voting for Brexit?
A: No one did. Certainly the British voters didn’t. The ramifications are great.
Q: Is it possible these scenarios you describe may not happen, depending on how the negotiations unfold?
A: The effect of not having access to the single market entirely infringes on free movement of labor, and free movement of labor is immigration. The Brexiters won because of the immigration card. If the government decided not to control immigration, maybe, but it will. The mere fact of halting visas for European workers will immediately shut out the U.K. from being a member of the single market.
Q: What are your thoughts on Donald Trump winning the U.S. presidential election?
A: Oh My God, indeed. It’s exactly what’s happened to us with Brexit. No one thought Trump would win, but he did. Implications of a Trump victory for the fresh fruit industry? My fear would be a tariff trade war. We all got used to an environment for the past 20 years of globalization and free trade. Because of Brexit and Trump, there will be a period of great uncertainty.
Laurence Olins is chairman at Pouport, a London-based subsidiary of a major food group representing growers from the U.K. and around the world, and a fourth-generation fruit marketer with 47 years in the produce industry. Olins holds chairman of the board positions at British Summer Fruits, the United Kingdom’s crop association for soft fruit, since 2003 and Poupart Group of Companies since 2007. In addition to his chairman positions, he holds non-executive director positions with G’s Chilled Foods, The Shropshire Farming Group, Grace Foods UK and Reynolds Catering Services.
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