The horticulture sector has warned of the “devastating” consequences of the 94% increase in electricity network charges set to take effect in April 2026.
Without immediate government co-operation, the financial shock could trigger widespread business failures and drive up food prices for millions of consumers, the British Tomato Growers’ Association and Cucumber & Pepper Growers’ Association have warned.
The planned standing charge could add almost £1m to operating costs for some large individual glasshouse businesses.
The organisations have said that those growers who supply year-round crops such as tomatoes, cucumbers and peppers operate on razor-thin margins and cannot absorb such a dramatic increase in costs.
“This is not just a business challenge; it’s an existential crisis,” said Simon Conway, chair of BTGA. “After weathering the recent energy crisis, this non-commodity network charge increase threatens the viability of glasshouse growers, unless they can pass the costs downstream, which in turn could drive further food inflation in 2026.”
Part of the problem is that the sector is excluded from the Energy Intensive Industries exemption scheme, despite operating with energy demands comparable to compensated manufacturing sectors.
According to the grower groups, this exclusion stems from a technicality based on classification codes and leaves growers at a commercial disadvantage from those in European nations where energy costs are lower.
The organisations have said inclusion in the scheme would offer considerable relief, but even with the 90% discount ongoing increases in energy costs across the board remain financially difficult for many businesses.
Read more: NFU alarm as rising energy prices continue to hit farmers
“We’re calling for a common-sense fix – at the very least update the eligibility rules to include CEA horticulture in the EII exemption scheme to reflect our energy-intensive reality,” said the grower bodies. “Even with support, energy costs continue to rise relentlessly, which places unprecedented pressure on growers.
“Without urgent action, UK food production is at risk and consumers will continue to feel the impact at the tills.”
The same problem is felt by apple and pear growers who store their fruit for much of the year to keep British supply on shelves all year round.
Executive chair of British Apples & Pears Ali Capper said the detail of what is changing and the increasing costs are “complex and not yet entirely confirmed”.
However, “we are very concerned and would ask government to consider the implications for food inflation if these huge increases are brought forward for apple and pear growers”, said Capper.
This comes following the NFU raising the alarm that soaring energy costs continue to threaten farming businesses.
The NFU wrote an open letter to Ofgem calling for a “fairer” approach to energy costs, as the current system bases standing charges on a business’s peak energy use. According to the farming union, seasonal users, such as farms running grain dryers or growers using refrigeration for only part of the year, end up paying high charges all year round.
“We’re hearing from many concerned farmers and growers that this is threatening their businesses,” said Bradshaw. “And in some cases pushing them to the brink of closure.”
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