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Sainsbury’s commits to £1 billion to become Net Zero by 2040

Sainsbury's commits to £1 billion to become Net Zero by 2040

UK retailer Sainsbury’s has issued a pledge that its operations will become Net Zero in line with the goal to limit global warming to 1.5°C, the highest ambition of the Paris Agreement, and a decade ahead of the UK Government’s own target. The project will focus on reducing carbon emissions, food waste, plastic packaging, water usage and increasing recycling, biodiversity and healthy and sustainable eating    Sainsbury’s will work collaboratively with suppliers and will ask suppliers for their own carbon reduction commitments. 

According to a press release issued by the retailer, its current carbon footprint is one million tons, which is a 35% absolute reduction in the last 15 years despite its space increasing by 46% over the same time frame. For the last six years Sainsbury’s has been awarded an A rating for taking action on Climate Change by the CDP, the highest rating of any UK supermarket.

Sainsbury’s will use the £1 billion investment to implement a programme of changes, with a focus on reducing carbon emissions, food waste, plastic packaging and water usage and increasing recycling, biodiversity and healthy and sustainable eating. The investment will enable the business to fulfil Scope one and Scope two emissions, putting the business on course for Net Zero a decade ahead of the UK government’s deadlines. 

The retailer will work with the Carbon Trust to assess emissions and set science-based targets for reduction, publicly reporting on progress every six months. The targets will align the business with the goal to limit global warming to 1.5°C, the highest ambition of the Paris Agreement. Sainsbury’s will work with suppliers to set their own ambitious Net Zero commitments, in line with the Paris Agreement goals.

Mike Coupe, now former CEO of Sainsbury’s, said: “Our commitment has always been to help customers live well for less, but we must recognise that living well now also means living sustainably.  We have a duty to the communities we serve to continue to reduce the impact our business has on the environment and we are committing to reduce our own carbon emissions and become Net Zero by 2040, ten years ahead of the government’s own targets, because 2050 isn’t soon enough. We have a strong heritage of reducing our carbon emissions – we have reduced them by 35% over the past fifteen years despite the footprint of our business increasing by over 40%. We invested £260 million in over 3,000 initiatives over the last decade, including the start of our LED lighting programme and refrigeration. Over the next 20 years we will invest a further £1 billion in programmes that will transform the way we do business and put environmental impact at the forefront of every decision we make.”

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Departure of Sainsbury’s CEO “not due” to Asda deal collapse

Departure of Sainsbury’s CEO “not due” to Asda deal collapse
Credit: Peter Nicholls, Reuters, The Times

 

Sainsbury’s CEO, Mike Coupe, has announced his resignation but will remain in his post until the end of May. His replacement will be current retail and operations director, Simon Roberts. Coupe has denied that his resignation is linked with the collapse of the £12 billion merger with Asda, emphasising that it was his own decision to leave. 

Sainsbury’s proposed merger with Asda fell through last year when the CMA found that the deal could lead to higher prices for customers. Speaking to the BBC, Coupe said, “If you looked at our AGM last year, 99.5% of our shareholders voted for me to carry on what I’m doing. It’s absolutely my choice You see the amount of change that is going on in the world of retail, who knows what will happen in the next five to 10 years, but one way or another there will be a significant rationalisation of brands you have taken for granted for a generation.”

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Over a quarter of UK consumers don’t trust organic label

Over a quarter of UK consumers don't trust organic label
Source: https://www.gov.uk/

 

A survey in the UK has found that more than a quarter of shoppers say they are “not confident at all” that food labelled as organic has been produced under organic farming methods. As wickedleeks.riverford reports, while shoppers have more ethical considerations when shopping, there is a “deep suspicion” over the labelling of ethical products. The poll was carried out online with 1,000 shoppers by Lloyd’s Register. According to the results, 26.9% of respondents reported being “not confident at all” that the organic label was accurate, while 61% said they were “fairly confident” and 11.8 per cent said they were “very confident”. Similarly, 20% of UK consumers said they were “not confident at all” or “very suspicious” about claims that vegan products do not contain meat.

According to the Food Trends report, “There is a deep suspicion on the part of shoppers regarding ethical food products. In an industry built on trust, this signals that this trust is under threat. This will mean that certification bodies will need to increase their efforts to educate consumers on the role of certification and what the logo represents.” 

The report also found the country in which the food is grown to be important for consumers, with 63% saying they check the source country of their food products. A third of respondents also reported being more concerned than they were a year ago about food safety concerns related to outbreaks of listeria or other food borne illnesses.

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Marks & Spencer extends network of in-store farms

Marks & Spencer extends network of in-store farms, credit. Thomas Samson, AFP
© Thomas Samson, AFP

 

UK retailer Marks & Spencer have extended their indoor farms to six other stores in London. In partnership with vertical farming specialist, Infarm, M&S has installed hydroponic indoor units that incorporate machine learning, Internet of Things technology, and eco-controlled systems to ensure the optimum amount of light, air and nutrients are used. Growing a selection of herbs, each unit can be controlled remotely via a cloud-based platform, which learns, adjusts and continually improves to ensure each plant grows better than the last one.

Infarm’s solutions offer environmental benefits, as each unit consumes 95% less water and 75% less fertiliser than soil-based agriculture. Each unit produces the equivalent size crop to 400 square metres of farmland, with absolutely no pesticide use. M&S has announced that it plans to continue rolling out in-store farms over the coming months.

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What can EU produce sector expect after Brexit?

What can EU produce sector expect after Brexit, Source: Freshfel
Source: Freshfel

 

 

With the UK all but certain to leave the EU in 2020, the European fruit and vegetable industry is viewing with great concern the potential impact this will have on intra-EU trade flows. A recent Rabobank report found that fresh produce will be the most affected food sector following Brexit, along with animal protein. At a time when the EU agricultural sector is still adjusting to the fallout of the Russian embargo, the potential loss of another key market could have devastating consequences.

Loss of trade would be costly on both sides of Channel

For many years now, the industry has benefited from frictionless trade thanks to single-market provisions, with the EU Mainland being a net supplier to the UK. In fact, the UK is the third largest destination for EU fruit and vegetables, receiving 3.1 million tons (€4 billion) of fresh produce each year. The two-way flows between the EU and the UK are worth €3.6 billion and account for about 10% of all intra-EU fresh produce trade. Besides generating large revenues for EU suppliers, this dynamic has left the UK heavily dependent on the EU for its fresh produce, with 55% of all the country’s imports coming from the EU-27 Member States. The main EU imports to the UK are tomatoes (480,000 tons), apples (245,000 tons), onions (230,000 tons), sweet peppers (175,000 tons), and soft citrus (164,000 tons). The largest source by far is Spain, which represents 45% of the total, followed by the Netherlands (22%), France (7%), Germany (6%) and Ireland (6%), with significant volumes imported from third countries via other EU Member States.

 

 

“55% of the UK’s fresh produce imports arrive from the EU”

 

 

The UK itself produces around 2.2 million tons of fresh produce (1.8 million tons of vegetables and 450,000 tons of fruit). Its exports to the EU total around 310,000 tons, most of which are shipped to Ireland (101,000 tons), France (90,000 tons) and the Netherlands (30,000 tons). The main trade is the re-export of bananas (64,000 tons) and other exotic fruits.

Rising prices

So, how is Brexit likely to change this picture? To answer this, multiple aspects need to be considered, such as tariffs, potential quotas, logistical hurdles, customs operations, certification, and tracing. At this point, we can only speculate about the terms of the eventual deal, as the final details of any agreement are still to be established. If the UK leaves the EU without a withdrawal agreement, then it will automatically revert to WTO trading rules in dealing with the EU. This would lead to a new tariff regime in place which would increase costs for operators in the EU and the UK who had previously benefited from zero-tariffs. What is clear, however, is that no extra tariffs will be applied to fresh produce for up to 12 months after the UK leaves the EU.

Bottlenecks and rotting produce

Secondly, border procedures and customs operations could lead to delays along the supply chain. This could have drastic consequences in the fresh fruit and vegetable trade given the perishability of the products. Trade flows are dependent on swift border procedures and customs clearance. Currently, 130,000 containers of highly perishable products arrive in the UK from the EU each year, with 55,000 containers sent from Spain alone to the port of Dover. The main bottlenecks of the EU-UK fresh produce trade are located at the ports of Dover and Rotterdam, and at the Eurostar connection in Calais. Dover is a very narrow transit port, lacking parking and storage facilities. Any new procedures will place great burden on ports and lead to backlogs, which in turn would compromise the timing of arrival and the quality of the perishable products. Morrisons supermarket chain has announced contingency plans that include switching to alternative ferry crossings, such as Le Havre-Portsmouth, if the Dover-Calais route becomes gridlocked. In turn, the Co-op supermarket chain has stated its intention to use air freight to bring in fruit to avoid empty shelves.

Ireland is particularly vulnerable given its relative geographical isolation. New border controls could result in lower supplies and higher prices for Irish consumers, too. Goods shipped between Mainland UK and Northern Ireland will also be subject to checks by UK and EU officials, which is causing particular distress in Belfast.

Higher costs

The UK may introduce different food safety regulations. This would lead to increased certification requirements, including certificates of origins, quality and phytosanitary certificates, which would constitute a further financial burden on operators. As fresh produce often arrives in mixed containers, with an average consignment comprising 10 different product categories, then based on an annual average of 130,000 containers, this would result in additional cost of up to €65 million in certification, according to a Freshfel report.

UK to turn into a rival for the EU?

The EU is concerned about what steps the UK may take to make itself a more attractive market, to the potential detriment of its European neighbours. When the UK becomes a third-country trading partner, new transhipments rules will need to be defined, governing how produce is stored and handled. If the EU wishes to retain its competitiveness as a logistical hub, it must ensure it continues to be a more attractive logistical environment than the UK, or risk losing trade. Another fear is that the UK will loosen MRL and phytosanitary requirements in order to attract imports from around the world. Such changes would have a knock-on effect on trade within the EU, where stricter rules are in place.

Less movement, less collaboration

While the movement of citizens is to be guaranteed during the transition period (up to December 2020), the current shortfall in seasonal labour in the UK is likely to be exacerbated and result in higher costs for UK producers. The field of research and innovation is also certain to be affected, with the UK one of the largest beneficiaries of Horizon 2020 funds, receiving €3.3 million in grants. For instance, the “Raditom” research project is investigating the preservation of tomato flavour, while the “EUFRUIT” project involves 12 countries focussing on coordination and information sharing.

The ideal scenario

Ultimately, the industry fears that the complexities of fresh produce trade with not be adequately considered given the limited time for negotiating exit conditions. Ideally, there would be a longer transitional period than the currently proposed 11 months (until December 2020) to allow a new free-trade agreement to be concluded and grant businesses sufficient time to adapt to any changes. An undertaking to protect the supply of EU fresh produce to the UK would defend jobs and economic growth on both sides of the Channel.

Moreover, if the UK integrates its digital customs services with those of the EU, this would help lubricate trade flows. It is vital not to reverse the great progress the sector has made in recent times. The issuing of electronic organic and phytosanitary certificates via ‘traces’ has greatly improved the monitoring and risk analysis of trade in plant products. The fine balance that has allowed the sector to flourish could be greatly undermined by any variation in price or conditions.

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Increase in citrus sales in UK

'Easy peelers' (such as tangerines, clementines and satsumas) account for more than half of all citrus fruit sold in UK supermarkets, Kantar Worldpanel data shows.

‘Easy peelers’ (such as tangerines, clementines and satsumas) account for more than half of all citrus fruit sold in UK supermarkets, Kantar Worldpanel data shows.

For the 52 weeks to October 11, oranges were the next most popular citrus fruit, with just under 27% of sales, followed by lemons with 11.3% and grapefruit with 6.5%.

Total citrus sales over this period reached nearly 384,000 tons, which was up 4% on 52 weeks to October 12 last year, and the spend inched up 0.3% to £726.5 million (€1b).

While there was 5.1% growth in the volume of easy peelers sold, the spend was down 0.4%, and for oranges both the volume and value sold were down, by 2.1% and 6.8% respectively.

UK shoppers increased their spend on the other citrus types, however. Lemon sales were up 13% in volume and 14% in value.

The highest growth, though off the smallest base, was for lemon+lime sales, which rose just over 37% in both volume and value.