Breaking the silence on the devastating impact of last-minute supermarket order cancellations.
“You must not mention my name or my company. I can’t afford to lose the business.” These are the words of a Sainsbury’s supplier. I’ve spent the last few weeks trying to find farmers affected by what the agricultural industry calls 'uncompensated forecast order cancellations'; when a supermarket back-tracks on an agreed deal at the last minute, leaving suppliers with a huge amount of food and no one to sell to. Farmers aren’t keen to talk about it for fear of being de-listed by their retailers.
This particular Sainsbury’s supplier is a pig farmer. We’ll call him Jack. In September, Jack was left with £6000 worth of unsaleable stock after Sainsbury’s cancelled half their order. They simply returned it to his farm. “That is a huge amount for a small business like ours. And it was all because they had decided to change their Christmas stock without telling us.”
The waste meat cuts went into freezers and were then either sold at a loss in the local market or given away. Jack still hasn’t got rid of it all. This is not an isolated case. He tells me about a neighbouring organic meat farmer who is suing food retailer Nisa for £75,000. “Nisa changed its mind, they found a technical reason not to accept the order".
Glut and cosmetic standards
Last minute order cancellations have long been a problem for farmers around the world. They are often linked to glut and cosmetic standards. The supermarket will agree a price and quantity with the farmer. Then, because of market forces or other external factors, the price or quantity may no longer appeal to the buyer. Jack explains: “Supermarkets don’t give a flying fuck about their suppliers. They over-order and then come up with spurious cosmetic standards excuses. They invent a reason to send it back.”
It is estimated that 20 to 40 per cent of fruit and vegetables grown in the UK are rejected on cosmetic grounds before they reach the shelves. “There are lots of different cosmetic standards,” says Martin Bowman from the NGO Feedback Global. “The product could be too big, too small, have slight discolourations. In the case of apples, they can be rejected for being too red. Big supermarkets have far stricter regulations than the EU’s cosmetic standards guidelines.”
On April 6th, 2014, the House of Lords EU Scrutiny Committee which deals with agriculture released a report entitled Counting the Cost of Food Waste. It called for more “whole crop” purchasing agreements between supermarkets and farmers to try to prevent food waste from order cancellations. Baroness Ros Scott, who chairs the committee, told the House of Lords on Thursday November 6th: “During our inquiry, we were most concerned to hear about wastage on farms caused by overzealous specifications set by retailers, last-minute order cancellations and punitive clauses for undersupply. We look to the retail sector to address those issues with its suppliers.”
A recent report by food sustainability charity WRAP, estimated that 5% of farm-level waste is caused by order cancellations and other supply chain management issues, but the figure is thought to be even higher given the reluctance of farmers to speak out.
Around 15 million tonnes of food are wasted in the United Kingdom every year and across the EU the figure is around 89 million tonnes. Organisations such as Foodcycle, The Real Junk Food Project and Trussell Trust run initiatives aimed at tackling in-store supermarket waste. But less fuss is made about the waste that is created before food reaches the shelves.
One organisation that is combatting waste at source is Feedback Global, with its Gleaning Network Initiative. The Gleaning Network has been around since 2012. It assembles groups of 10 to 20 volunteers and takes them to UK farms to gather leftover crops. “It’s essentially a fun day out,” says Martin, Feedback’s Gleaning Co-ordinator. “We tend to glean about 1 to 2 tonnes of food per trip. We once got 11 tonnes of pumpkin.”
The practice of gleaning has gone on since the Middle Ages and is hugely popular in the US. Since its inception, the UK Gleaning Network has gleaned around 110 tonnes of food. That’s 1.7 million portions. “We are absolutely scratching the surface,” says Martin. “This probably accounts for 0.1% of food waste. The task is colossal. Often there will be 100 tonnes of produce and our team of volunteers will only be able to make a small dent”.
The food is given to charities like FareShare who then redistribute it to school breakfast clubs, homeless shelters and elderly people’s homes. Fareshare provides more than 1 million meals per month in the areas in which it works. The food is a lifeline for centres that are struggling with reduced budgets.
The Gleaning Network are increasingly forming partnerships with farmers, who otherwise struggle to deal with the waste food. Martin explains: “If food is not gleaned then farmers tell workers not to harvest things that don’t meet cosmetic standards. It simply gets ploughed back into the fields or fed to cattle. It can also be sent for anaerobic digestion or for processing and made into ready meals. Farmers make basically zero for that though, it’s tuppence.”
The toothless GCA
Despite large financial losses farmers are reluctant to speak out. On March 11th, the industry’s regulator Christine Tacon, in her role as the Groceries Code Adjudicator (GCA), told the House of Lords that food suppliers are operating under a code of silence, afraid to speak out against the bullying tactics of the big retailers. Tacon told peers that it was “difficult to get suppliers to come forward” with evidence of breaches of the industry code of practice, because they were scared of retribution if unmasked.
The GCA began operations in June 2013. It was tasked with ensuring that the 10 largest supermarkets treat their direct suppliers lawfully and fairly, and in accordance with the Groceries Supply Code of Practice. In February of this year, the GCA was handed new powers to impose financial penalties of as much as 1% of annual UK turnover on large retailers.
Whilst the move was met with praise, Feedback Global feel the GCA still lacks the ability to ensure a fair deal for indirect suppliers. Martin is skeptical of the regulator’s power in the face of the giant supermarkets: “It’s great the GCA has been given this power to fine the retailers but there are question marks over whether their budget to dispute fines will be able to match the big supermarkets in a court of law.”
The food industry is unique in its structure with thousands of small producers feeding into around ten large retailers. Jack says that problems such as forecast order cancellations come with the territory: “It’s the down side of working in this industry and dealing with these people. We are minnows in a sea of sharks. What happens is the shit is passed back down the chain. We can’t shit on anybody.”
“The big four” supermarkets are Sainsbury’s, Tesco, Morrison’s and Asda. I want to find out who the main culprits are when it comes to order cancellations, but Martin tells me: “It’s difficult to say which supermarket is the worst offender. We don’t have a wide enough sample.” He says that cancellations happen across the board. Jack has another theory: “Nisa are one of a bunch who operate at a different morality level, and they are often forgotten about. People home in on the big four, but what you’ll find is that the most wasteful practices are operated by the middle ranking businesses, of which Nisa would be one, Co-Op another, and Costcutters.”
A Sainsbury’s spokeswoman told me: “We’ve got projects in place all the way through the supply chain to combat food waste, right from depot level with Fareshare, and we also do projects with the Trussell Trust and FoodCycle. Around 300 of our stores are taking part in a food donation program scheme at present. We have 1400 stores, so it’s a journey that we are on. That number is going to grow in one shape or form.”
Cancellations have a huge impact on farmers like Jack who work in the short shelf-life industry. “The products are perishable so if they get rejected, they have a very short selling life,” he says. “What do you do with it? Having perishable products makes you extremely vulnerable.”
Our conversation is cut short, as Jack has to go and tend to his pigs. He ends on a sombre note: “It’s a pretty shitty industry. Morals tend to go out the window. They’ve got you by the balls.”
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