Calls for Urgent Government Action as Inflation Reaches 40-year High

The hospitality sector is calling for urgent government action is inflation reaches a 40-year high driven by increasing food and fuel costs.

Consumer Price Index (CPI) inflation leapt to 9.4% in the 12 months to June 2022, up from 9.1% in May, according to the Office for National Statistics (ONS).

Trade body called on the government to take decisive action during its upcoming business rates review, among its recommendations, UKHospitality called for any reductions under reformed business rates to be reflected in bills ‘as quickly as possible’. It also drew attention to the ‘profound impact’ of the pandemic on hospitality property values and prices. Many are carrying heavy debt and facing soaring costs, the body said.

“The priority must be enabling reductions in bills to be felt immediately, and the government needs to ensure that the cost is reduced for those sectors hit hardest by the pandemic and in most need of support,” UKHospitality CEO, Kate Nicholls, said.

“We strongly believe that government needs to reflect the unprecedented impact of the pandemic, compounded by the impact of an economic downturn and high levels of inflation, in the new rates scheme. If this is taken into account, the hospitality sector can play its full part in the wider UK economic recovery, creating jobs and delivering skills and boosting our high streets and communities.

Brian Perkins, President, Budweiser Brewing Group UK&I says:
“Today’s ONS inflation figures demonstrate the need for more Government support for the brewing industry, and details on their plans to ease economic pressures on the hospitality industry. Like many other businesses, we have been hard hit by commodity price increases and import taxes for beer have increased above average.

We know that beer is hugely important to the UK economy, especially in driving the post-Covid recovery. In the UK, the beer sector as a whole is responsible for nearly 900,000 brewing and pub jobs, and the value of these jobs to the UK economy is £22.9 billion. At Budweiser Brewing Group, we are committed to supporting the long-term recovery and resilience of the hospitality sector, as well as driving forward our shared prosperity for our partners and communities and producing the UK’s most sustainable beers.

The key to driving this forward will be further government support. On behalf of the industry, we hope the Government will recognise the importance of brewing to the economy and reduce beer tax, delay DRS and other packaging taxes as well as provide ample incentives for companies to invest in sustainability and the path to net zero – to help protect our industry, our people and our planet, as we continue to weather these economic storms.

Chief Executive of the Food and Drink Federation, Karen Betts said:
“It’s very concerning to see food price inflation hit 9.8% in today’s ONS figures. Food and drink companies are doing everything they can to contain inflation and to limit price rises for hard-pressed households, but the situation is undoubtedly very challenging, with the cost of ingredients and energy still rising and labour shortages biting.

“While the inflation the UK is experiencing is being driven by disruption in the global economy, there are things our government can do to help ease the cost of living crisis for households and to help food and drink businesses thrive through a difficult period. Our industry wants to see bold new policies from a new Prime Minister that create the conditions for investment to boost productivity and competitiveness. These include incentivising business investment through rapid reforms to capital allowances, incentivising skills training, reforming burdensome regulation and red tape, and promoting growth in new markets through exports.”