Arla calls for ‘urgent action’ to tackle labour shortage in wake of Lurpak price controversy

By Katy Askew

- Last updated on GMT

Milk production is falling amid a mounting labour crisis in UK dairy / Pic GettyImages BanksPhotos
Milk production is falling amid a mounting labour crisis in UK dairy / Pic GettyImages BanksPhotos

Related tags Arla foods

Dairy cooperative Arla Foods has warned of a ‘chronic shortage’ of qualified farm workers in the UK, an issue it said is contributing to price inflation in the dairy sector.

The company, which has been caught up in a social media outcry over the price of its Lurpak butter brand, cautioned the labour shortage is already reducing dairy production in the UK and suggested food price inflation will ‘get worse unless urgent action is taken’.

The labour shortage warning comes on the back of a survey of Arla’s UK farmers that showed 80% of those looking for workers have received either ‘very few’ or ‘zero’ applications from people with the right experience and qualifications. Arla blamed the situation on a combination of the end of free movement of workers from the EU due to Brexit, the aftermath of the pandemic, and a ‘host of other factors’ that mean that more than three-fifths (61.3%) of farmers are finding it more difficult to recruit now than in 2019.

Milk production taking a hit

The shortage of people is already affecting production: milk volumes are down by around 3% now compared to last year, Arla revealed.

In its surgery, a ‘small but significant’ number of farmers say they have already reduced output by cutting the number of milkings (4.3%) and/or reduced the size of their herd (6% due to staff shortages. More say they will take these steps (6.9% and 6.8% respectively) or leave farming altogether (11.9%) in the next year if nothing changes.

Building a skilled workforce and easing immigration controls 

Arla suggested that a multi-faceted response to the shortage is ‘urgently’ required.

The cooperative has called for specialist roles like herd manager to be added to the Shortage Occupation List in order to increase the size of the pool of available workers quickly. For a longer-term solution, it has also started to engage with the new Institute of Agriculture and Horticulture to focus on improved skills and qualifications for farm workers, as well as recruitment into the industry.

But as a cooperative Arla is today calling on the Government to go further.

“Addressing the labour shortage and the implications this could have for food security is vitally important. Now is the time for all of us, across government and industry, to work urgently and collaboratively to shift outdated misconceptions about farming and bring new talent into the industry,”​ Arla’s UK Managing Director, Ash Amirahmadi, said.

“That’s why I’ve written to the Secretary of State today calling on him to accelerate the review of the labour market promised in the Food Strategy White Paper, and for him to commit to a new cross-departmental strategy to bring talent into food and farming, making it a career of choice for people from all backgrounds. This will need to include on-farm skills and training, but will also address teaching in schools, the understanding and attitudes of careers advice providers, support for people wanting to change career, and a marketing campaign aimed at promoting careers in our industry.

“If we don’t act now the current shortages of people will only get worse, jeopardising production on farms, undermining our food security and further fuelling higher prices for consumers.”

Lurpak controversy and cost-price inflation

Arla’s rallying call, released today (7 July), comes as its Lurpak spread brand became the focus of a debate over the cost of living crisis when shoppers took to social media to highlight a jump in the price on shelf. Sainsbury’s was shown to be charging £7.25 for a 750g tub; with Tesco and Asda selling 750g tubs for £5.30 and £6 respectively. Data analysis from subsequently revealed the cost of a 500g pack of Lurpak has increased by 33% compared to June last year.

The labour crisis is just one issue faced by Arla’s farmers. The company has also pointed to spiking feed, fertiliser and fuel costs on-farm which are pushing up the farm-gate milk price the cooperative is paying.

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