Living Wage increase will cost low-margin wholesalers £12m next year

The increase in the National Living Wage announced today will add £12.4m to wholesale distributors’ wage costs next year, the equivalent of 546 full time jobs, says the Federation of Wholesale Distributors. 

Chancellor Philip Hammond’s announcement in his Autumn Statement of the rise in the rate for over 25s affects 20,000 employees of FWD members, whose margins are also under assault from commodity price inflation, pension auto-enrolment and the Apprenticeship Levy.

FWD chief executive James Bielby said: “While we support rises in the remuneration of the least well paid, it is not sustainable to absorb another rise from April next year. If the Government continues to pursue above-inflation increases, the result will be higher cost to consumers, stalled investment in the supply chain, and eventually job losses.”

However there was better news for wholesale distributors with the announcement of the Government’s commitment to investment in transport infrastructure, and the continued freeze in fuel duty announced in today’s Autumn Statement.

Hammond said the Government would spend an extra £1.1bn on English local transport networks and £220m on reducing traffic pinch points as part of its £23bn investment in innovation and infrastructure over the next five years.

Bielby said: “Any support from the Government in reducing running costs is welcomed by distributors who supply food and drink to communities and small businesses across the UK, but a long-term programme like this will do little to help those facing rising costs now.”

It was also announced that the Government will publish draft legislation on the Soft Drinks Levy on December 5. FWD has made ministers and officials aware of the increase in fraud which is likely to result from a rise in UK drinks suppliers’ prices.

 

 

 

 

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