Temperature-controlled food prices set to rise, warns Cold Chain Federation

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The Cold Chain Federation has warned that the cost of temperature-controlled food could rise. Credit: Getty / Jacobs Stock Photography Ltd

The Cold Chain Federation has warned that the rise in National Insurance contributions announced during the Budget could lead to increases in the cost of supplying temperature-controlled food and drugs.

Chancellor Rachel Reeves announced on 30 October that employer National Insurance contributions would rise from 13.8% to 15%, while the threshold at which businesses start paying National Insurance on worker pay will be lowered from £9,100 to £5,000.

However, the amount employers can claim back on their National Insurance bill was raised from £5,000 to £10,500, meaning that 865,000 employers won’t pay at all.

This was part of a wider effort by Reeves to raise an additional £40bn in tax to pay for spending, which included increasing the minimum wage.

Costs could rise

According to the Cold Chain Federation, the temperature-controlled industry – which is responsible for delivering chilled, frozen and pharmaceutical products – will face an additional £620m in costs over the next parliament as a result of the changes announced.

As a result, the federation has urged the UK Government to reconsider the impact of the decision.

"This is just the beginning,” said Phil Pluck, CEO of the Cold Chain Federation.

“The £620m increase will inevitably lead to higher prices for consumers. Coupled with the impending business rates review, the UK public can expect to pay more for essential food and medicine.”

‘Hindering ability to create jobs’

"Since the budget announcement, cold chain operators have reported that increased wage bills are hindering their ability to create new jobs and offer competitive salaries,” Pluck continued.

“The government's economic strategy risks stifling growth, suppressing wages, and ultimately placing a greater financial burden on consumers."

The Cold Chain Federation is a trade association that represents businesses that run the temperature-controlled supply chain in the UK.

This supply chain contributed £14 billion in gross value added, supported 184,000 jobs and generating £3.7bn in tax revenue in 2023.

In other news, representatives from Unite the Union have taken part in protests outside the offices of the biggest shareholders in Bakkavor​​​​ as strike action continues at one of its UK production plants.