FDF: Energy crisis is having a dramatic impact on the industry

London / UK. (fdf) The seriousness of the energy price situation and its impact on food and drink manufacturers continues to be a top focus at the British FDF Food and Drink Federation. Many FDF companies are facing 400 to 500 percent rises in their energy bills, while others report suppliers are demanding huge security deposits or bank guarantees to secure fixed contracts.

While food prices soar across the UK, the energy crisis is having a dramatic impact on the food and drink industry as the companies continue to work hard to keep prices down for consumers.

Many of the businesses have now reached the limit of passing inflationary pressures on, having found energy efficiencies where they can, and cutting other costs, including limiting product ranges, R+D and advertising. However, the acute economic situation is exposing real fragilities in the food and drink supply chain, particularly for SMEs, those sectors who are intensive energy users, and users of CO2.

The UK Government set out their plans to freeze household energy bills at an average of GBP 2,500 a year for two years. Businesses and public sector organisations have been promised «equivalent support» for six months, and support for an additional six months for businesses in «vulnerable industries». Details of the plan and who qualifies as a vulnerable industry are yet to be announced. There will be a review in three months’ time to consider where this should be targeted.

Measures were also announced to increase domestic energy supply, including lifting the moratorium on shale gas production, new licensing for oil and gas exploration, and acceleration of new sources of energy supply to nuclear, wind and solar. There will also be a review of net zero, to consider whether delivering the target is not placing undue burdens on businesses or consumers, with a report due by the end of the year.

FDF welcomes the support the Prime Minister Liz Truss announced to help households and businesses deal with soaring energy bills. In particular, this provides critical reassurance to households that they will be able to access the energy they need over the coming months.

The FDF is already undertaking urgent conversations with the UK Government to understand what support will be available to hard-pressed food and drink manufacturers, not least smaller businesses, given the role in ensuring an uninterrupted supply of high quality and affordable food and drink to everyone across the UK.