Scottish Bakers Facing an Existential Threat

Dunfermline / UK. (sb) Scottish Bakers, a membership organisation which supports the bakery trade throughout Scotland, has in late August written to politicians to bring to their attention the plight the sector in Scotland is currently facing. Chief Executive Officer Alasdair Smith said:

«The current economic crisis, the biggest this country has seen in nearly 50 years, is placing unprecedented strain on the Scottish baking industry, and many of our members report an existential threat to their survival due to soaring input costs and widespread recruitment challenges.

«As a result, I am asking the UK government for urgent action to support, and provide relief to, this most noble of trades that every day puts fresh bread, savoury snacks, and sweet treats into our communities.

«Throughout the darkest days of the pandemic, our members worked hard to keep baking, recognising the vital role they have in Scotland’s food chain. Many businesses went above and beyond by ensuring deliveries of products went to those most vulnerable in our communities or those on the front line helping to protect and treat us.

«The early signs of rising input costs began to become evident over a year ago, but nothing prepared our members for the widespread, and dramatic, increases they all face today. My board and members advise me that we are now at a point where many could be facing an existential threat to their survival because of these additional costs.»

According to Scottish Bakers the average increases across all major input costs were in late August as follows:

• Electricity – 214 percent
• Gas – 207 percent
• General Insurance – 83 percent
• Ingredients – 41 percent
• Motor Fuel – 44 percent

Furthermore, the latest intelligence on energy pricing for businesses seeking new supply contracts paints an even starker picture than the above figures suggest. CEO Alasdair Smith:

«I have spoken with several members in the last week facing an imminent quadrupling of their electricity costs.

«Pressures on our members are compounded by a severe squeeze on recruitment. Recent research we undertook suggests more than 90 percent of members have vacancies they cannot fill, increasing pressure on production and the workforce that remains. As a major provider of apprenticeship training, this recruitment crisis is also directly impacting our own business with new learner registrations, and therefore contract milestone payments, significantly down on past performance.

«Wider issues with supply of everything from basic commodities to packaging materials adds to the burden of challenges our members face. Urgent action is essential if we are to maintain the current capacity of Scotland’s baking industry.»

Scottish Bakers believe there are several specific measures that would bring some help – some are reserved matters whereas others are devolved and within the authority of the Scottish Government to address:

• Energy price cap for commercial energy customers (UKG power)
• Enabling existing users of diesel-fuelled bakery ovens to once more take advantage of «red» diesel fuel (UKG)
• Change immigration policy to allow employment of EU bakery workers to address the workforce gap (UKG power)
• Reintroduce reduction in VAT payable by businesses providing hot and cold food and drink for consumption either on or off the premises. (UKG
• Introduce rates relief for manufacturing business sites (SG power)
• Generous grants to install on-site «green» generation capacity – in example for solar panels (SG)
• Delay introducing costly regulation: in example DRS, Mandatory Calorie Labelling, Restriction of promotions (SG power)

The Scottish Bakers urge the UK Government at Westminster to find a way forward to ensure the member’s ovens stay firmly switched on (Editor’s note: Meanwhile, the situation of Scottish bakers will hardly have improved from the end of August until today. Rather the opposite will be the case. Many bakeries in Europe are suffering from high energy costs, high raw material costs and a lack of staff. Whereby the effects of Brexit are of course exacerbating some of the problems in the UK).