Postponed tax the right path for industry, says food group

By Neil Merrett

- Last updated on GMT

Related tags: Food manufacturers, Industry

The UK Food industry has welcomed a UK government decision not to implement an autumn hike in fuel duty as a vital measure to ensure financial stability for its members.

The Food and Drink Federation (FDF) says it has been pressuring government for some time not to implement the 2 pence tax hike on fuel, which it claims will further exacerbate raw material costs related to food and drink manufacturing.

Increasing oil prices have affected all aspects of the food industry from ingredient sourcing down to packaging material costs, through distribution has been particularly affected with strikes by hauliers taking place across the globe from London to Greece over the last few months.

In light of these concerns, UK Chancellor Alistair Darling last week agreed to hold back on implementing the tax increases potentially until next year.

Baring the brunt

Some haulage associations believe that any future fuel rises must be passed on to manufacturers, and, in turn, the consumer, to ensure that continued road haulage for finished products and ingredients is sustainable.

However, Julian Hunt, a spokesperson for the FDF, claimed that such a tax increase would have served to cause 'unnecessary pain' to food manufacturers, who are already working to improve their fuel use and output.

"We appreciate that environmental concerns were partly behind the proposed hike,"​ he stated. "But food manufacturers are committed to making a real difference in reducing their environmental impact - and only this week almost 40 FDF members made a public pledge to using fewer and friendlier road transport miles."

RHA

Back in May, a spokesperson for the Road Haulage Association (RHA), which represents distribution groups across the UK, told FoodProductionDaily.com that any industrial sector reliant on hauliers would have to bare the brunt of costs if the industry was to continue.

"Financially, the industry cannot any longer take the hit," ​he stated at the time. "Since the beginning of the year, prices have risen 14 per cent, in any sector therefore, prices have to be passed down, there is no other choice."

RHA policy director Jack Semple said the food industry has to continue to seek new means for reducing its fuel needs to make its distribution network more sustainable.

He claims that food manufacturers can improve efficiency in the supply chain by re-examining their operations, planning ahead, giving advanced indication of busy periods to haulage companies and fully optimising daily vehicle loading and unloading.

Related topics: Market Trends

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