Certain food and drink could be missing from supermarket shelves this winter as small businesses go bankrupt due to high electricity bills, a food industry leader has warned MPs.
It’s going to be a “really tough winter,” Karen Betts, chief executive of the Food and Drink Federation (FDF), told the Business, Energy and Industrial Strategy Committee on Tuesday morning.
The food industry was “in the eye of quite a storm” as businesses struggled to stay viable while also trying to keep products available to consumers, she said.
If small firms are forced to collapse this winter due to rising energy costs, there will “absolutely” be a “reduction in supply of some products”.
Companies will feel “reassured” about having a “more detailed conversation” with the government about what will happen in the event of a winter power failure, Betts added.
“Once we get through the winter we’ll see how it goes, but different businesses will be affected differently. And some enterprises may not pass,” she told the deputies.
Many firms are now abandoning their fixed rates and find it “impossible” to fix prices at an “affordable price” in the future.
After offering prices that were “exponentially higher” than they had been before for the next few years, most firms switched to a daily rate. It “makes their life pretty precarious,” she said.
There was “real criticality” in the supply chain of many small businesses, leaving “many of our larger companies worried” about their own supply chains.
In particular, energy-intensive users such as “flour mills, coffee roasters, [and] bakeries”, will be affected more than others by “very high prices”.
What’s more, there was “real tightness” in the carbon market, despite government and company work to “bring more resilience into the system”.
“The system is still quite fragile and this will lead to higher prices and possibly out of business for some companies,” she added.