Bakery businesses in Scotland face an “existential threat to their survival” due to soaring costs and widespread recruitment challenges, according to trade body Scottish Bakers.
Chief executive Alasdair Smith has written to Holyrood and Westminster politicians to bring their attention to the plight the baking industry is facing in Scotland. He called for urgent action to support, and provide relief, to the sector.
“The early signs of rising input costs began to become evident over a year ago, but nothing prepared our members for the widespread, and dramatic, increases they all face today,” Smith said. “My board and members advise me that we are now at a point where many could be facing an existential threat to their survival because of these additional cost.”
He highlighted average increases across all major input costs, including:
- Electricity – 214%
- Gas – 207%
- General insurance – 83%
- Ingredients – 41%
- Motor fuel – 44%
Smith added that the latest intelligence on energy pricing for businesses “paints an even starker picture” with several of members facing “an imminent quadrupling of their electricity costs”.
These pressures are compounded by widespread recruitment issues, he added. “Recent research we undertook suggests more than 90% of members have vacancies they cannot fill, increasing pressure on production and the workforce that remains. As a major provider of apprenticeship training, this recruitment crisis is also directly impacting our own business with new learner registrations, and therefore contract milestone payments, significantly down on past performance.”
Smith called for urgent action if Scotland’s baking industry is to maintain its current capacity. As such, Scottish Bakers outlined several specific measures, some of which need to be handled by Westminster and some by the Scottish Government, that would help. They are:
- Energy price cap for commercial energy customers
- Enabling existing users of diesel-fuelled bakery ovens to take advantage of ‘red’ diesel fuel
- Change immigration policy to allow employment of EU bakery workers to address the workforce gap
- Reintroduce reduction in VAT payable by businesses providing hot and cold food & drink for consumption either on or off the premises
- Introduce rates relief for manufacturing business sites
- Generous grants to install on-site ‘green’ generation capacity, for solar panels etc
- Delay introducing costly regulation such as DRS, mandatory calorie labelling, restriction of promotions.
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