Food and Drink Wholesale UK (FWD) has warned that not including wholesale depots in any exemptions to the proposed higher band of business rates from 2026 would be “anti-competitive” and “further drive food price inflation”.
Earlier this month, officials reportedly said the Treasury was working to exclude large supermarkets from the increase, which will raise business rates for properties with a rateable value over £500,000.
The extra tax raised is to be used to fund a business rates discount for smaller retail, hospitality and leisure premises with a rateable value below £500,000.
However, in an emergency meeting this week with senior Treasury officials, FWD CEO James Bielby said that granting an exemption to supermarkets without extending that to food and drink wholesalers would “not only be anti-competitive, it would also further widen the price differential between local shops and big retail”.
“Wholesalers are vital to the UK’s food supply chain and public service provision, should be treated on par with large retail premises, and must be included in any exemption. Supermarkets already get the retail, hospitality and leisure relief for smaller stores, while wholesalers get nothing,” he added.
The call comes as a survey of FWD members found 80% of wholesalers surveyed have sites exceeding the £500k rateable value threshold, and will therefore be “hit hardest” by the higher multiplier.
Business rates have already risen by 25% to 35% in the past three years, and according to the trade association the reform could add an additional 20% increase, “a hit that wholesalers simply cannot afford”, it said.
Facing these cost increases, 80% of wholesalers say they will be forced to raise food prices and pass the costs onto local businesses.
Treasury officials told FWD it is “fully aware” of wholesalers’ contribution to the food and drink supply chain. They said business rates policy was still being discussed, with no firm decisions made on any exemptions ahead of the budget in November.
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