The new prime minister has been urged to take “urgent action” to mitigate the cost of crippling industry energy bills, or see thousands of small and medium-sized companies go bust.
A raft of trade bodies signed a letter on Friday calling on the government to rewrite the National Food Strategy, to take into account the “unparalleled” impact of the crisis.
It said many of the 7,590 micro-SMEs in the food and drink sector, including micro-businesses, with combined turnover of £21bn and 134,000 employees, would not survive unless there was intervention.
Signed by organisations including the Provision Trade Federation, the British Meat Processors Association, the British Poultry Council, the Ferderation of Wholesale Distributors and the Federation of Bakers, the letter calls for action to lower the burden of energy prices for food businesses, which are already facing major cashflow problems.
It also demands measures to help businesses in obtaining and maintaining affordable trade credit insurance or other financial guarantees essential to their continued operation.
“We are concerned about the extraordinary pressures facing the food and drink industry,” said PTF director general Rod Addy.
“The situation is so serious that we felt it could not wait for the prime minister and cabinet to be in place.”
The letter states: “Our members are facing unsustainable increases in energy prices on top of multiple supply chain challenges, all of which are adding to the cost of living crisis, especially for those with limited means.
“We are asking for urgent mitigation of energy bills for the whole food sector, in line with the special recognition we were accorded in the context of Covid-19 measures. In many cases, businesses are facing fourfold or fivefold increases, or worse, in their gas and electricity bills once existing contracts expire. All forms of food manufacture involve heating and/or cooling at different stages of production for quality and safety reasons. That means they have no way of avoiding these massively higher charges without the ability to fund major new efficiency investments or radical re-engineering of existing processes, which will themselves take time to deliver results.”
The call to revisit the National Food Strategy is another key demand, with trade bodies arguing the proposals pre-dated the crisis.
“We also believe government needs to look again at its recently published Food Strategy in the light of these issues,” the letter says.
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