British Producers Urge Andy Burnham to Control Rising Costs
The survey by the Food and Drink Federation (FDF) showed that 88% of companies believe working conditions have worsened since the Labour Party came to power in 2024. Additionally, 91% of respondents stated that the situation has either remained unchanged or worsened compared to the first quarter of 2026.
The business confidence index for the second quarter was −31%, compared to −64% three months earlier. Meanwhile, average production costs, including wages, energy, and ingredients, have risen by 3.8% over the year.
The FDF linked additional supply chain disruptions to the conflict in the Middle East. More than a third of respondents reported cost increases of 5–10%. While 60% of companies have managed to offset these costs, 72% expect they will have to raise prices next year.
The decline in profitability has impacted the companies' plans. 87% of participants do not intend to increase spending on staff training, and 84% do not plan to invest in research and development over the next 12 months.
Before presenting Burnham's government's first budget, producers urged ministers to focus on labor costs, energy costs, and regulatory requirements. 75% of companies, including 91% of small and medium enterprises, opposed increasing labor costs above inflation. About 56% supported measures to make energy cheaper, and half of the respondents called for reviewing regulations to reduce regulatory burdens.
Cost-cutting measures included refraining from raising the minimum wage above inflation rates, reducing energy expenses, and subsidizing extended producer responsibility for packaging. Additionally, 50% of companies requested an agreement with the EU on sanitary and phytosanitary rules to reduce trade discrepancies, and 34% sought assistance in improving worker skills.
The survey was conducted from April 13 to May 1, 2026, before Burnham was appointed Prime Minister of the UK. "Rising costs and political uncertainty are stalling investments, so it is not surprising that food and drink producers consistently express pessimistic sentiments," said Balvinder Dhoth, FDF's Director of Development and Environmental Sustainability.
