Karen Betts tells MPs: Now is the time to support food and drink businesses
06 September 2022
The Food and Drink Federation’s (FDF) chief executive Karen Betts today gave evidence to the BEIS select committee on the impact of the cost-of-living crisis on businesses in our sector and on households.
With new Prime Minister Liz Truss poised to announce emergency measures to combat soaring energy prices, Ms Betts laid out the concerning situation facing UK food and drink manufacturers and where government action would help.
Currently food price inflation is at 12.7%, and it’s expected to continue to rise over the coming months, driven by soaring energy and ingredient costs and rising wages. Some FDF members are seeing rises of between 400 and 500% in their energy bills.
“Our industry feels caught in the eye of a pretty powerful storm at the moment,” Ms Betts said. “We know we have a huge responsibility to keep prices affordable, but all of our manufacturing companies are experiencing exponential rises.”
Karen Betts was also keen to point out the precarious situation smaller businesses in the food and drink supply chain find themselves in due to inflation. If the worst were to happen and some companies couldn’t make ends meet, we could see a “tightening of supply in certain products” that we find in shops.
The pandemic and the war in Ukraine have put huge strain on the food and drink supply chain, and now the high energy costs are further squeezing companies that are energy intensive or are reliant on coal and CO2.
“We've had that question of resilience for more than a year now,” Karen Betts said. “Whilst some work has been done by the government and by companies to introduce more resilience into the system, it is still pretty precarious and that will feed into price rises. So it is a worrying time.”
Ms Betts went on to say that companies have been cutting costs and introducing energy efficiencies wherever they can to keep food available, but government needs to step in with more support for households in paying their energy bills too.
“Our industry is struggling to absorb the level of regulation that's coming at us on things like plastics and packaging – where we know we have got to get to good outcomes and we know we've got to get there quickly,” she said.
“We need a review of what the priorities are here, more support for these investments that need to be made in the green transition, and more listening to industry on how progress can be made in a more efficient and streamlined way than it's currently envisaged by government.”