THE UNITED KINGDOM, London. UK’S Food and Drink Federation (FDF) calls on Chancellor Jeremy Hunt to support the struggling sector following alarming results of its latest industry survey.
According to the latest FDF State of the industry report, Britain’s food and drink manufacturers have seen input costs increase by an average of 21% over the past 12 months. As a result, nearly 50% have cut or paused investment projects expecting business conditions to continue to deteriorate in the coming months.
The industry’s confidence is at its lowest level since the FDF started the survey series in 2018, the industry body reported.
The report states that price pressures due to soaring energy costs and the labour shortage crisis remain a significant brake on the industry’s growth. Energy costs have reached 22% of operating costs in Q3 2022, up from 12% in 2021. The vacancy rate increased to 9.1% in Q3, up from 6.3% in Q2, with vacancies ranging from high-skilled roles (engineers or scientists) to production operatives (machine operators or drivers).
Therefore, companies are focusing on measures to alleviate internal cost pressures while also calling on the government to help companies manage energy price volatility and help “build a more secure pipeline of skills for the industry.” According to the report, the sector could massively benefit from government measures such as tax incentives for capital investment and reducing the costs of moving goods between the UK and the EU.
The FDF points to figures from the Insolvency Service showing that in the first eight months of 2022, there were more insolvencies in the food and drink industry than during the whole of 2019.
The FDF’s chief executive Karen Betts said: “Our companies need reassurance that government understands the issues they are facing and will act to help our sector shore up its resilience. From incentivising investment in the transition to green energy and growth to reducing the costs of burdensome regulation and helping companies manage energy price volatility.”
Source: The Food and Drink Federation