Wholesalers face a difficult winter after the Chancellor’s much awaited Autumn Statement only added further costs and confusion to the industry, by doing little to relieve the pressure on the food supply chain or providing clarity on the support available to the sector as enters its busiest period of the year.
With inflation currently at 11.1% and food price inflation at 16.4%, FWD chief executive James Bielby said that Jeremy Hunt’s statement providing no further information on energy bill support for businesses after March 2023. Also, by requiring the public sector to operate within the constraints of the March spending review, this essentially means that inflation will need to be absorbed.
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There was one shining light in the form of business rate support for organisations across hospitality, retail and leisure, however, the FWD has stated that it is still unclear whether the wholesale sector will be eligible for this support.
The FWD has given an overview on how the statement will affect other areas of wholesaler’s operations:
Public sector funding:
By requiring the public sector to operate within the constraints of the March spending review, this essentially means that inflation will need to be absorbed. This is likely to result in reduced budgets for public sector food. This will be to the detriment of both wholesalers and the vulnerable people being fed in education, hospitals and care settings. The announcement of an increased education budget is welcome but this will not come into effect until 2024/25. Wholesalers are struggling in the here and now, and public sector budgets should be adjusted to account for this.
In a further burden to wholesalers they will have to contend with an RPI increase in alcohol duty when only two months ago they had forecasted and planned for a freeze.
National Living Wage:
Against the context of increasing costs in every single discipline and no further financial support from the Treasury, wholesalers will need to find space within budgets to contend with the single biggest rise in the National Living Wage. FWD support paying vital workers in the wholesale space fairly, but against the incredibly tough economic backdrop, and with no support from Government, this is a very challenging requirement.