The rising cost of electricity could result in the closure of more independent abattoirs, cutting plants and catering butchers if there isn’t urgent intervention from the new prime minister.
That is the conclusion of a new report from the Association of Independent Meat Suppliers (AIMS), which has said the scale of the increases in electricity costs are having a dramatic effect on its members.
“AIMS members are coming to us daily horrified by the amounts their bills have increase by. In most cases these are triple digit percentages,” said Tony Goodger, AIMS’ spokesman.
The report features a case study of a vertically integrated poultry business, which has recently renewed its energy contract at a 437% increase. The business said its monthly electricity cost will increase from £22k to over £118k. “This will have a massive effect on our business. As things currently cannot stand we can’t pass these increases to customers as they in turn wouldn’t be able to increase their selling prices to the consumer,” the company’s finance director said.
Another poultry abattoir sourcing birds from farms across the east of the country and supplying food manufacturers, wholesalers, and catering butchers is featured in the report. In March 2022 the business took the decision to no longer run its freezers permanently, to stop leaving the chill line full over-night and running the despatch fridge over the weekend. And yet the cost of electricity continues to rise.
For the period March 2021 to December 2021 the bill for electricity was £425,151. From 1
January to 31 July 2022, the bill was £407,797 at this current rate the bill for this year will be
around £900,000.
“Businesses with cash earmarked for expansion, site upgrades or other investment is now being eaten away simply by having to pay extortionate electricity bills,” Goodger said.
“It is our belief that the cost of production is the single most important issue for the incoming Prime Minister as is it this which is driving inflation and thus the cost of living crisis.”