The European continent is dealing with extremely tight vegetable supplies due to cold weather in Spain and Italy. Broccoli and iceberg lettuce supplies are about 70 percent less than usual this time of year, and spinach supplies are even lower. In the Netherlands, greenhouse production under lights is estimated to be down from 800 hectares to 100 due to extremely high energy costs. This situation is causing significant supply gaps across the European continent.
As a result of the shortages, UK retailer ASDA is capping sales of tomatoes, peppers, and lettuce at three per customer, and Morrisons said they would introduce limits of two as of yesterday. Tesco is the latest UK retailer to introduce restrictions to customers. Retailers who work on fixed prices and contracts are struggling to meet orders. Local greengrocers and wholesale markets have to produce available, but it comes at a price. Prices of some products have doubled or tripled.
Differences in food regulations
Some European buyers are starting to complement their supplies with produce from Egypt. Egyptian iceberg lettuce, for instance, has arrived on the Dutch market. One US exporter, AMS Export, said they were asked to quote a shipment of Mexico-grown bell peppers and USA lettuce for Europe earlier this week. "However, I doubt we will receive orders due to the risks associated with differences in food regulations between Mexico/US and the EU/UK," said Rob Borley with AMS Export.
GlobalGAP, a common standard for farm management practice, hardly exists in the US, which means that UK buyers would have to accept crop input lists (PPPL and spray record), US lab tests for MRLs, and microbiological residues. "We would stand behind product quality, but I don't think growers and exporters from Mexico and the US would want to bear the risks associated with MRL and microbiological testing in the UK, where results can vary."
"Having said that, we do have access to plots that are compliant with EU and UK regulations. However, retailers and importers often move too slowly assessing due diligence and risk," Borley commented. "By the time submitted records are checked, the harvest has moved to a different plot. It's complicated to export to Europe on short notice."
In the past, AMS has flown lettuce to the UK to cover shortages. However, today's lower margins throughout the supply chain result in less appetite for risks and associated costs. As a result, consumers may run into empty shelves. This situation isn't expected to last long as temperatures are going up and things are expected to gradually go back to normal.