Restaurant owners, butchers, farmers and food businesses nationwide are facing dramatic increases in energy costs as prices increase as much as 400 per cent in some cases.
The average energy bill for households will rise by 80 per cent under the new price cap increase, but businesses are not protected by this so will have to buy energy on the wholesale market at much higher rates.
It’s the perfect storm as consumers also face a cost-of-living crisis with less disposable income available and the government are offering little in the way of support.
You have to decide if you want to operate at all. Jock Gibson, farmer and butcher
Livestock farmer and butchery owner in Moray, Scotland, Jock Gibson said his energy costs are set to increase by as much as 400 per cent in October.
“Where do you find an extra £24,000?” asked Gibson explaining how his energy bills are due to rise from £8000 to £32,000. “It’s going to be savage. Businesses will have some stark decisions to make.
“It’s not a situation where you can increase the value of your product because people have less money,” he added. “Your other option is to make savings but with the year we’ve had if you haven’t made all the savings you can, what are you playing at?”
“The last option is to decide if you want to operate at all,” said Gibson.
Small butchers like Gibson’s closing could have serious implications for small sustainable livestock farmers everywhere.
“If we start to lose the butchers, we risk losing the crofters (small-scale farmers in the Scottish highlands), the rare breed enthusiasts and the smallholders.”
Trying to remain competitive is a real challenge. Luke King, technical and supply director at organic veg box company Riverford
Technical and supply director at organic veg box company, Riverford, Luke King reported that the increase in energy costs is affecting all departments of the business.
“Energy is a real problem because we’re exposed everywhere. Our foreign and UK suppliers are exposed, our logistics, particularly our refrigeration, are exposed, plus our office.
“Then you consider all the other inflationary pressures such as labour wages because we’re committed to the real living wage as a business,” said King.
“All the time we’re trying to keep a lid on our pricing, but trying to remain competitive is a real challenge,” added King.
“The electrification of our vehicle fleet and the fact we generate a lot of solar energy means we’re in a slightly better situation.”
We are down on our knees. Harriet Mansell, chef-owner of Robin Wylde and Lilac
Hospitality is another sector being punished by the rise of energy costs alongside citizens feeling the effect of the cost-of-living crisis.
Harriet Mansell, chef-owner of two restaurants in Lyme Regis, Robin Wylde and Lilac, which have a focus on locally foraged ingredients, said, “We are down on our knees, all our costs have gone up and we can’t increase prices because customers won’t come in.”
“Margins were already tight in hospitality,” said Mansell. “We’ve done everything we can from a business point of view, the model does not work anymore.”
“We do so much for education and training, I employ 20 people in the local area, and as a business, we’ve always tried to be a force for positive change,” said Mansell explaining she will try everything, but she does not know what the future holds.
It’s impossible. Lisa-Jane Fraser, owner of eco-estate, Frasers
Lisa-Jane Fraser, owner of an eco-estate in Kent, Frasers, that comprises of a farm, a wedding venue and a restaurant, is considering closing her restaurant, despite taking extreme measures and producing over 60 per cent of their own energy through renewable energy.
“Once my solar panels are not working so efficiently (due to the reduced sunlight in autumn and winter), I’ll only open four days a week and I’m going to cook overnight to take advantage of the lower rate tariffs,” said Fraser.
“I can’t even get a quote for my energy bill at the moment, but it could be up to £7000 from £1800 last year.”
“I’m doing what I’ve been asked to do, but it’s impossible. It’s the unknown, you can’t even do flow projections,” added Fraser. “I think I will move away from restaurants and focus on events.”
Fraser said the hospitality sector desperately needs government support and should reduce VAT for the industry as it would reduce costs for restauranteurs and prices for consumers.
“It would make a massive difference,” said Fraser.
The government need to get real about climate Abby Allen, director of meat box company, Pipers Farm
Director of sustainable meat box company Pipers Farm, Abby Allen said, “We’re lucky to have the model we do, producing meat from grass (requiring little energy), but we have a fulfilment centre and butchery where our energy costs have doubled.”
“That’s the difficulty; how much can you pass onto the consumer because we want to make sustainable, organic food more accessible,” Allen said.
“It’s the most challenging time we’ve ever had as a business,” added Allen.
On what the government need to do: “They need to get real about climate,” said Allen.
“There has been a sheer lack of investment in renewable energy. If we don’t want to be held hostage, we need to be energy self-sufficient,” finished Allen.