Two-fifths of British growers of strawberries and raspberries could go out of business by the end of 2026 amid rising costs and poor pay from supermarkets, according to a study.

Almost half of British growers said they no longer make a profit and 53% reported the financial health of their business as bad or very bad, according to a survey by British Berry Growers (BBG), an industry body that represents farmers producing 95% of the berries sold in the UK.

If problems are not addressed BBG warned of “a future massive reduction in the supply of fresh British berries”.

More than a third of those surveyed – 37% – are already considering reducing their production or moving out of berry farming entirely, while 39% said their relationship with retailers had never been this bad, according to the study.

Nick Marston, the chair of BBG, said: “We must take this survey as a wake-up call and a sign to take urgent action. The future of this great sector hangs in the balance. It would be a travesty to lose British berries.

“We need support from retailers in the form of fair returns, but we also need support from the government to ensure we have an uninterrupted supply of pickers during our peak season.”

The cost of production has risen 30% for growers but this has not been reflected in the prices paid by retailers, he added. While the cost of a punnet of strawberries in the shops went up by an average 27p between 2021 and last year, for example, growers’ returns only increased by 3.5p.

“Our belief is that growers are not seeing their fair share of that inflation,” Marston said.

Supermarkets are working hard to source food locally and ensure consumers can “afford the essentials”, said Andrew Opie, the director of food and sustainability at the British Retail Consortium trade body.

“Food retailers source, and will continue to source, the vast majority of their food from the UK and value the strong relationships they have with farmers,” he added. “Retailers are also working incredibly hard to limit price increases for consumers given many people are struggling to afford the essentials.”

But Marston warned that the problem was already having an effect as production of strawberries was down 5% this year despite good growing conditions as farmers moved out of the market altogether or reduced their planting area.

BBG wants the government to increase the length of the seasonal worker scheme visa for overseas pickers from six to nine months so that people are available throughout the growing season.

It also wants improvements to the export system to make it easier for growers to take advantage of market opportunities in the EU and farther afield. Marston said the volume of berry exports had fallen to a seventh of pre-Brexit levels because of the introduction of complex rules such as phytosanitary checks since the UK left the EU.