UKH calls for Ofgem intervention to help struggling businesses
The trade body considers the current 20% food price inflation the “tip of the iceberg” of a much bigger problem which also includes rising energy costs and a lack of support
With rising energy costs and a lack of support mounting across the board for hospitality businesses, UKHospitality is urging energy regulator Ofgem to force suppliers to engage in automatic renegotiations for those businesses paying the highest costs.
Energy suppliers are also being asked to play their part and offer the option of spreading payments over a longer period of time, in order to help cash flow.
UKHospitality chief executive Kate Nicholls said that the current situation is only “the tip of the iceberg” for an industry which has already seen 150 pubs close down this year.
Nicholls added: “Energy costs, food price inflation and staffing shortages are a triple whammy that are dragging businesses to failure. Something has to be done or hospitality will look like a shell of itself in a year’s time.
“The simplest action on offer is to get energy suppliers in line. It’s Ofgem’s job to do that and we need to see action urgently. Automatic renegotiation of the highest cost energy contracts, signed during the peak of the crisis, needs to be enforced and suppliers need to show flexibility in their payment rates. Those two actions would remove a huge weight from the shoulders of businesses and decrease the possibility of venues having to put up prices to survive, which ultimately fuels inflation.”
It comes as the latest data from CGA Prestige Foodservice Price Index showed price inflation above 20%, which UKH said signals the need for urgent intervention to save hospitality businesses.
