Hospitality businesses are seeing “terrifying” price rises of between 14% and 18%, Food and Drink Federation boss Ian Wright has told MPs, as he warned of the knock-on effect for consumers.
Food and Drink Federation Chief Executive, Ian Wright, has told the Business Energy and Industrial Strategy members group (BEIS) that MPs need to think seriously about inflation because “In hospitality, which is a precursor of retail, inflation is currently running somewhere between 14% and 18%. That is terrifying.”
His concerns reflect what bar, restaurant and hotel owners have been saying for months. That they will have to start passing on the increases to customers.
And with the publication of the latest ONS figures yesterday, Kate Nicholls, Chief Executive of UKHospitality again urged the Chancellor to lock VAT at 12.5%. Nicholls said, “Today’s inflation figures are extremely concerning for the sector, with costs for hospitality businesses across all lines rising by 11-13%.
“Such rising costs have the potential to seriously derail the sector’s recovery – and its ability to boost national recovery – due to a heady cocktail of substantial increases in the cost of essential goods and services crucial to their businesses.
“Combined with suppressed sales due to labour shortages, it is inevitable that businesses will have no choice but to pass on some of this pressure to their customers through higher prices.
Consequently, we urge the Chancellor not to compound matters with tax increases in the form of business rates and a return to historic rates of VAT. Locking in the 12.5% rate of VAT for the long term for hospitality will avoid building in more sustained inflationary pressures across the economy.”