Trade bodies from across the UK food industry have responded to the latest financial support measures issued by government. Many have welcomed the Energy Bill Relief Scheme, but warn that more action is needed.

The Scheme will see gas and electricity costs for UK food and drink businesses capped, according to a government announcement. The Scheme covers those on fixed-term contracts, agreed on or after 1st April, and will see wholesale prices for electricity capped at £211 per megawatt hour (MWh) and £75 per MWh for gas.

Businesses on other contracts, including those on variable rates, will come under a maximum discount band around £405/MWh for electricity and £115/MWh for gas. Suppliers of energy are to apply the reduction automatically to all eligible non-domestic customers, with the government compensating the suppliers (not the end user) for the cost.

Offers some relief

Chief executive of the Food and Drink Federation Karen Betts commented: “We welcome the scope of the government’s Energy Relief Scheme and the speed with which it’s being rolled out.  It addresses the largest and most volatile cost pressure facing our industry right now. Although some aspects of the scheme are still to be clarified, it offers relief to food and drink manufacturers across the UK.”

Long-term solutions

Provision Trade Federation director general Rod Addy said: “We are pleased business secretary Jacob Rees-Mogg has responded to the PTF-led letter to government, which the heads of many concerned trade bodies signed.

“Any reduction in projected energy costs will provide suppliers and customers alike with much-needed relief. The news that this automatic relief will be applied to contracts fixed since 1st April this year for as long as the contract was agreed will also be welcome.

“However, we still await more details about how the Energy Bill Relief Scheme will apply to individual businesses.”

Addy went onto say that the energy crisis will not “cease any time soon,” and that the PTF are asking government to continue the outlined support beyond the six-month period. He said that by doing so, government can “offer longer-term certainty [to businesses] to enable them to plan ahead more effectively, as well as looking to it to develop sustainable long-term energy security for UK industry.”

He added: “Government also needs to recognise the special and vital role of food manufacturing in considering support beyond the initial period.”

Addy said that the PTF is looking forward to government continuing to work with food and drink businesses to address other serious issues such as labour costs and availability, rising input costs across the board and a more secure landscape for affordable trade credit insurance.

He concluded: “We also want a trade environment that fosters fair and healthy competition between domestic and overseas suppliers, delivering affordable food that doesn’t compromise on quality and building a strong base for exports.”