Tory leadership candidates have been warned they must do more to support food & drink manufacturing, or risk heaping further inflation on shoppers.
In a letter sent today to Rishi Sunak, Penny Mordaunt, Liz Truss, Kemi Badenoch and Tom Tugendhat, FDF CEO Karen Betts said the next prime minister should intervene in government plans threatening to pile more costs onto businesses and consumers.
She has called for them to commit to “reducing the costs of regulation” such as the plastics packaging tax.
“A good deal of current regulation is actually imposing new costs on our industry without a clear benefit in return,” said Betts in the letter.
”For example, current government plans to create a circular economy for packaging are overly complex and have been poorly consulted on with business. As such, they risk forcing more costs onto hard-pressed shoppers. We urge you to intervene to make these plans sensible and value for money.
“Meanwhile, the ill-thought-through plastics packaging tax is imposing a huge administrative burden on businesses of all sizes as well as additional costs.”
Betts has also urged the candidates to commit to tax reforms, including on VAT and business rates, and measures to ease labour shortages and create a “pipeline” of skilled workers. “A shortage of labour and skills is one of the drivers of food price inflation,” she said.
Read more: The consequences of Tory upheaval for food policy
She has called for more consistent regulatory regimes from devolved UK governments, warning that otherwise there will be cost rises for businesses that will inevitably “find their way into items in everyday shopping baskets”.
Betts said: “Companies are doing everything they can to contain the impacts of inflation. We know we have a responsibility to provide good and affordable food, and we are cutting costs everywhere we can to limit price rises for shoppers.
“But there are limits – our companies must also remain viable if they are to be a vibrant part of our economy into the future. We are now in the 10th consecutive month of food price inflation. With the cost of ingredients and energy still rising relentlessly, companies in our sector think that food price inflation still has some way to run.
“With this in mind, there’s more the government must do to support us through the cost of living crisis to help contain price rises for households and to help our sector emerge from the crisis in growth.”
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