The Federation of Wholesale Distributors has put together a letter on behalf of its members addressed to the Prime Minister that shares the channels concern about the impact of the recent Budget.
Claiming that it threatens the long-term sustainability of the UK’s food and drink supply chain, the letter was signed by numerous major wholesalers and highlights that the National Living Wage increase will add an estimated £110m in direct wage costs, while the increase in Employer’s National Insurance will add additional costs of £31m a year to an already embattled sector:
“The Budget will compound spiralling costs and undermine the wholesale sector – at a time when it should be encouraged to play a pivotal role in driving growth. The viability of regional food distributors is now threatened while there is additional pressure on the sectors’ ability to fulfil public sector contracts to schools, care homes, prisons and hospitals with nutritious food.
Read more: Reaction: Autumn Budget set to cost wholesale channel £110m
Our members contribute significantly to the UK economy, with annual revenues reaching £36 billion. They also directly employ 60,000 people and add an impressive £3 billion of gross value to the UK economy each year. The scale of our sector’s contribution highlights its significance in powering the Government’s mission to kickstart economic growth.
Dawood Pervez managing director, Bestway Wholesale said: “The planned increase in employer National Insurance contributions alongside the National Living Wage increases will wipe off 10% of our profitability, significantly hindering our ability to reinvest in jobs and the wider supply chain. At a time when many wholesalers are already faced with rising prices, these added costs will cause further inflation across the board and will not drive economic growth in our sector or country as a whole.”
Read more: Budget 2024: FWD outlines the impact on wholesalers
Andrew Selley, chief executive of Bidcorp UK said: “It’s hard to have a positive outlook. For the Government to say “invest, invest, invest”, whilst costing businesses £25 billion in NI changes is ludicrous. Two thirds of our suppliers and customers are SMEs and many will struggle to survive these tax hikes on top of the minimum wage increase and Employment Rights Bill.”
Coral Rose, chief executive Fairway Foodservice said: “As wholesalers in supplying the foodservice sector we are particularly concerned about the impacts on our customers, and the real risk that these measures will lead to reduced spend, less jobs and ultimately fewer businesses and therefore less consumer choice. Wholesalers serving schools, hospitals and care homes will struggle to fulfil these vital public sectors catering contracts, impacting hugely on vulnerable people.”
