UNITED KINGDOM, London. There has been a dramatic shift in demand for meat products over the last couple of weeks. As people stock up and prepare to stay home, the demand for retail products from supermarkets has seen a 20 to 30% rise while orders from the out-of-home food service sector have had a huge drop-off.
However, not all meat processing companies are able to simply divert capacity to increase supply to the supermarkets. Suppliers to the food service industry generally produce bulk packs that are often frozen. They don’t have the packaging and machinery to produce the kind of vacuum and modified atmosphere product with the requisite nutrition labelling that the retail trade requires.
The pressure is therefore on the remaining food processing factories that are set up for this. These retail suppliers are currently working to full capacity to meet this unprecedented demand, but there are potential issues that could seriously impact their operations.
There are serious risks to the supply of imported goods that are used in domestic production. But perhaps the biggest threat is the impact of Covid-19 on the workforce.
Meat processing is highly labour intensive, with large numbers of staff working at close quarters. While the FSA has assured the public that infection cannot be spread via food, the risk here is that infected workers cause either whole shifts to be shut down or critical skills to be temporarily lost from the workforce for 14 days.
It is therefore essential that healthy workers come to work and sick workers, and those at risk due to an infection in their household, stay at home in line with government policy. But, there is a serious risk that waged workers will not stay at home for statutory sick pay, which is less than a quarter of typical wages in the meat processing sector.
Large processing operations are also vulnerable because Business Interruption Insurance protection does not cover losses or closure related to Covid-19, and government support for business interruptions only relates to small businesses. Indeed, in its latest statement this week, the Groceries Code Adjudicator could still not ‘offer a view as to whether current circumstances amount to force majeure’.