‘If we can’t get access to labour market, we are finished here’ warns poultry entrepreneur
PUBLISHED: 11:48 05 October 2018 | UPDATED: 11:48 05 October 2018
Things have never been better for celebrated Essex premium turkey producer Paul Kelly.
Sales are booming at the family business, based at Danbury in Essex. A fledgling 300k (£230k) dollar turnover business in the US is beginning to take off, and another 29m euro (£26m) organic business in which he has an interest in Germany is soaring, with 11% growth last year. Meanwhile at home, sales are up about 7% for the £15m turnover UK business.
But there is a dark cloud on Kelly Turkeys’ horizon - Brexit. Without a built-in labour supply from the European Union, and a customs union to underpin trade in Europe, and with the prospect of cheap poultry imports winging their way here from the American continent, Paul believes the home-grown poultry sector could be under threat.
With a firm foothold now in continental Europe and the US, he is less worried for himself than for the industry as a whole, but he hopes hard Brexit will be avoided and arrangements with Europe protected.
However, he has already begun to take steps to protect his business.
“We have made the decision to close some farms that produce hatching eggs that we send over to Germany,” he explains.
Next year, his Ayrshire operation will be moving to Holland with the loss of eight jobs in Scotland in order to ensure he can service his market in Germany and continental Europe.
Operating outside of a customs union with the EU would be “a disaster”, he predicts. “It would wipe out British agriculture. I can’t imagine we won’t have a customs union, I really can’t, and we’ll have to go with EU law.”
A convinced Remainer, he is dismissive of the argument that Brexit will open up opportunities with the rest of the world. “In terms of opening up other trade deals, personally we deal with them anyway,” he says.
On the other hand, poultry imports from countries like the US, Brazil and Argentina could undercut the UK poultry industry by 20/30%, taking out huge swathes of volume, he fears. “I know that because I’m out there doing it,” he explains.
Paul’s immediate problem is uncertainty, and the lack of any real clarity about what the industry should expect. The government says it is ‘listening to industry concerns’, but what that means for food processing businesses such as his is unclear.
“Without seasonal labour and full-time (permanent) labour coming in from Europe the industry will 100% grind to a halt: that’s no exaggeration. If they were not to come over, farming would stop,” he says.
In the poultry industry as a whole, about 60% of the workforce is made up of EU nationals, and about 40% for farming overall, he says. “Our own particular business we are very seasonal. At Christmas, 90% of our workers are EU national. In the summer, when we are producing the hatching eggs and poults, we are getting up to 60%.”
In practice, that means a seasonal Christmas workforce of 70 and a summer one of 30 to bolster the permanent 28-strong workforce at Danbury. If he doesn’t get access to that vital EU labour market, “we have got no choice but to downsize it,” he says. “That’s the worst case scenario, but food service, hotels, we are not the only ones in the same boat.”
In the 1990s, it was the fall of the Berlin Wall which transformed the Kelly Turkeys business, started by Paul’s father Derek, bringing with it an influx of labour. Rather than focusing on the bulk market, the Kelly family went niche, with a sought-after premium product, KellyBronze, reviving the original American wild Bronze turkey breed and promoting it on the basis of taste and quality over size and cheapness.
In the US, breaking through has been “tough”, Paul admits, but the market has huge potential. When he came over to Virginia in 2013, his dry-plucked turkeys raised US eyebrows, and he and team were regarded as “those crazy English guys”.
He is up against loss-leading turkey products being offered at a fraction of the cost of what he produces for the Thanksgiving market there. His tactic has been to introduce his product in quality butchers in Washington, New York and Boston, and online, and focus on the US’s huge Thanksgiving market for other luxury products such as Champagne, presenting a turkey which can match these premium goods on quality. Already he is making inroads, often through word of mouth, with his birds accounting for 35% of all the Thanksgiving business at the Washington butcher he supplies. At the same time, the continental European business has been boosted by a strong organic market.
Perversely, it is at home that he faces his toughest challenge.
“Our business in the UK is going very, very well - the last three years have been the best three years we have ever had. The market for premium turkeys has been very good for us,” he says.
He adds: “It’s not game over. The big issue is labour. If we can’t get access to the labour market, we are finished. It’s not going to pay for us in the UK without the labour.”