The Chancellor’s energy bailout for food companies, revealed by The Grocer last week, has been the source of plenty of angst and more than a little confusion.

News that the British Industrial Competitiveness Scheme (BICS) would be widened to include 3,000 extra companies, including hundreds of food producers, was greeted as at least a partial breakthrough by food leaders. Yet, incredibly, the money has still not been 100% confirmed by the Department of Business & Trade (DBT).

And even if it is, the vast majority of food and drink companies will still miss out.

Today, calls for a more urgent and comprehensive response ramped up even further, with the BRC’s director of food and sustainability Andrew Opie telling MPs on the Efra Committee there should be “immediate intervention” to help companies across the food supply chain with their energy bills.

Warning that consumers were facing at least a year of historically high inflation, the consortium called for a six-month suspension of the extended producer responsibility tax, a six-month moratorium on all new food industry regulation, and immediate energy support for frontline food companies such as bakeries and food factories.

A wave of inflation

While there are many parallels between the current situation in the Middle East and previous crises, one of the biggest worries is just how slow ministers’ response has been, despite industry experts agreeing almost unanimously that a wave of inflation is coming over the horizon (even if they are reluctant to say exactly how big it will be).

Opie, who is keeping his cards close to his chest, told today’s hearing that whatever the level of inflation, the key thing was that it was likely to last for at least a year, rather than be a flash in the pan.

Ministers don’t have time on their hands to sit and wonder what to do.

The FDF, which has made no bones about its predictions of a 10% spike by Christmas, today accused Labour of lacking “urgency” and, like the BRC, called for “rapid and targeted” action to cut energy costs for the most exposed businesses.

“Government is listening, but it’s the sense of urgency that bothers me. If we’re going to act to change what is coming, we need to act now,” says FDF CEO Karen Betts.

Signs that the government is listening are few and far between. Following some initial confusion over exactly which businesses would qualify for the BICS extension, some firms are still waiting for confirmation, with one source telling The Grocer that, despite repeatedly asking for clarity from the DBT, ”it’s been a case of radio silence”. 

And it isn’t just the government that appears to be living on another planet when it comes to the scale of the industry’s problems. MPs across the political spectrum seem equally detached.

Out of touch

Anyone in doubt about just how out of touch MPs are with the food industry received a sharp reminder today, while watching proceedings at the Efra Committee.

At a time when manufacturers, retailers and farming groups are screaming for help with energy bills and asking for urgent intervention, MPs from all sides of the House directed their hostility not at the Treasury, or those with the levers to genuinely support the supply chain and protect consumers in the short term, but elsewhere.

Instead the poor man in their sights was the Groceries Code Adjudicator Mark White, who was repeatedly pilloried for his lack of action to protect smaller producers.

At one point he was even asked why, instead of applying for the £3.5m retailer-funded sum that supports the Adjudicator and his nine seconded staff, he had not put in a bid for 100 staff, if that was what was needed.

Does the Efra Committee really think that the biggest threat to the supply chain right now is the lack of intervention on prices by the Adjudicator, who one MP described as an “an apologist or PR machine” for supermarkets?

The answer, categorically, is no. And while there are valid arguments over whether the GCA and the more newly established Agricultural Supply Chain Adjudicator, Richard Thompson – now freshly brought together under Defra – can be given more powers in the longer term, MPs and others in power need to get a grip on their priorities as the UK food industry faces yet another oncoming storm.

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