Autumn Statement adds cost and confusion for food wholesalers

Members of the Federation of Wholesale Distributors face a tough winter as today’s Autumn Statement does little to relieve the squeeze on the food supply chain or provide clarity on the support available for this vital sector

“With inflation at 11.1% and food price inflation at 16.4%, little support has been made available for a vital sector which is tasked with keeping the nation fed,” said FWD Chief Executive, James Bielby.

In summary:

Energy

The Chancellor provided no further information on energy bill support for businesses after March 2023. This information is needed urgently, and the wholesale sector must be included within available support packages. After the Statement, it was revealed that the decision on which businesses will be in scope for further support will be announced on December 31st.

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,” said Bielby.

Business rates

We welcome business rate support for organisations across hospitality, retail and leisure settings, but once again it is unclear whether the wholesale sector will be eligible for support. “There is no retail, hospitality or leisure without supply from wholesale, and still the Treasury seems unable to grasp this important point,” said Bielby.

Alcohol Duty

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.

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