The increase in the National Living Wage announced last month will add £12.4m to wholesalers’ wage costs next year (the equivalent of 546 full time jobs), the FWD has revealed.
Chancellor Philip Hammond’s announcement in his Autumn Statement (November 23) of the rise in the rate for over 25s affects 20,000 employees of FWD members.
FWD chief executive James Bielby said: “While we support rises in the remuneration of the least well paid, it is not sustainable to absorb another rise from April next year. If the Government continues to pursue above-inflation increases, the result will be higher cost to consumers, stalled investment in the supply chain, and eventually job losses.”
However there was better news with the announcement of the Government’s commitment to investment in transport infrastructure, and the continued freeze in fuel duty announced in the Autumn Statement.
Mr Hammond said the Government would spend an extra £1.1bn on English local transport networks and £220m on reducing traffic pinch points as part of its £23bn investment in innovation and infrastructure over the next five years.
Bielby said: “Any support from the Government in reducing running costs is welcomed by distributors who supply food and drink to communities and small businesses across the UK, but a long-term programme like this will do little to help those facing rising costs now.”
And earlier this month (December 5), ministers confirmed that the soft drinks levy – the “Sugar Tax” – will be introduced in April 2018, despite industry opposition.
Treasury minister Jane Ellision said the policy would encourage product reformulation while minimising unnecessary burdens on business.
“The government is determined to act in the best interests of the nation’s children and the Soft Drinks Industry Levy has an important part to play,” she said.
Secondary legislation will be published for consultation in early 2017, with the final levy rates announced in the 2017 Budget. Drinks with 5g of sugar per 100ml will face a lower rate of tax, while those with more than 8g per 100ml will face a higher rate.
The Government confirmed that the levy would be implemented on producers and importers rather than as a point of sales tax.
Throughout the consultation period, FWD expressed concerns that introduction of a levy could mean that manufacturers passed price rises on through the supply chain, leading to the growth of illicit and grey markets, to the detriment of legitimate suppliers,