Foodstuff producers to pass on more cost to buyers
THE cost of living crisis is about to get a whole lot more serious as the UK heads towards its highest inflation rate in nearly 50 years and prices just keep rising.
Almost half of food and drink firms, and on average a third of all industries across the UK, hiked prices last month for their goods or services.
One in five reported a decrease in their own sales. Half reported an increase in the prices of materials, goods or services they bought the month before.
The Office for National Statistics’ business insights figures show more than three quarters of businesses in the accommodation and food service industries reported an increase in the price of materials, goods or services for which they had to pay to keep their business running in March.
A potential 15 per cent price increase on a staple food like chicken will have a big impact on everyone’s budget and could be devastating for some.
It is not, however, solely the global energy crisis, as suggested by Prime Minister Boris Johnson, that is driving all of this - including the “crazy” chicken prices, as he put it. Of course, it plays a part, said the British Poultry Council.
However, Brexit seems further up the list of core influences.
“It is not ‘mainly fuel’ that’s the problem, as PM said in his Good Morning Britain interview. It is everything. Input costs like water, labour, energy and feed are all up,” the BPC said in a seething thread it pinned to its Twitter page.
“Combined with trade barriers, shipping delays for machinery plus a skills shortage (vets & lorry drivers), this all adds a cost that has to be recovered through the marketplace.
“With ongoing Brexit pressures, plus bird flu & war in Ukraine,
BPC members face immense challenges.”
The BPC said: “What’s ‘crazy’ is the unfair system producers are expected to operate in.”
It might sound like an ominous statement when one of Scotland’s top fund managers declares: ‘I don’t see where our place in most of the industries of the future actually is.’
However in an extensive exclusive interview with business editor Ian Mcconnell, James Anderson, former Baillie Gifford and Scottish Mortgage Investment Trust chief, also offers a solution.
This includes Scotland succeeding in tackling its lack of scale in industries of the future by borrowing £10 billion and gearing this up to a £20bn investment pot with backing from private sector financiers.
Also this week, should those in the high echelons be awarded considerable pay increases when others are struggling to make ends meet? Deputy business editor Scott Wright says that such are the huge sums of money often distributed in salaries and bonuses that reading the reports can be an eye-watering experience. But this year, as the UK faces its biggest inflation crisis for around 30 years, the sums being doled out seem even more out of touch with reality. He adds: “Some people may argue that the salaries and bonuses being awarded in the current climate leave a bad taste in the mouth.”
In energy, BP and Shell were the subjects of further calls for a windfall tax after they posted a £5bn and £7bn profit respectively.
In property, Bowman Rebecchi secured a contract to oversee the sale of 22 new homes in Gourock as it launches its estate agency business. And, a fond farewell to tireless Scotland Food & Drink chief James Withers, who said this week he is to step down.