The cold chain sector is looking at an additional £620m in costs from the National Insurance contributions increases announced in the recent budget.
This is according to calculations by the Cold Chain Federation, which sounded the alarm on Tuesday over what it dubbed “a significant increase in the cost of supplying vital temperature-controlled food and drugs”.
Following this weekend’s news that supermarkets face a £2.5bn increase in NI costs over the next five years – with Tesco alone anticipating a £1bn bill – the cold chain sector too is set to rack up costs of more than half a billion pounds during the current parliamentary term.
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The CCF said this would “likely see a hit in the consumer’s wallet”.
CEO Phil Pluck added: “This is just the beginning – the £620m increase will inevitably lead to higher prices for consumers.
“Coupled with the impending business rates review, the UK public can expect to pay more for essential food and medicine.”
Pluck warned this would have a negative impact on the industry’s ability to recruit and retain talent.
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“Since the budget announcement, cold chain operators have reported that increased wage bills are hindering their ability to create new jobs and offer competitive salaries.
“The government’s economic strategy risks stifling growth, suppressing wages, and ultimately placing a greater financial burden on consumers.”
Last week, M&S boss Stuart Machin said rises in both the minimum wage and National Insurance paid by employers will cost the grocer £120m, while Sainsbury’s chief Simon Roberts warned its costs would increase by £140m from April as a result of the proposals outlined in Chancellor Rachel Reeves’s budget.
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