Media release: Scottish bakers facing an existential threat

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SCOTTISH Bakers, a membership organisation which supports the bakery trade throughout Scotland, has today written to Holyrood and Westminster 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.”

The average increases across all major input costs are as follows:

  • Electricity – 214 per cent
  • Gas – 207 per cent
  • General insurance – 83 per cent
  • Ingredients – 41 per cent
  • Motor fuel – 44 per cent

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

Added 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 per cent 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.”

There are several possible 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 – eg for solar panels (SG)
  • Delay introducing costly regulation: eg – DRS, mandatory calorie labelling, restriction of promotions (SG power)

Finished Smith: “I urge the UK Government at Westminster to find a way forward to ensure our members’ ovens stay firmly switched on.”

Notes for editors:

Scottish Bakers’ chief executive officer, Alasdair Smith, is available for interview.

Scottish Bakers has been supporting and protecting the interests of Scotland’s bakery trade for over 130 years.

Scottish Bakers’ core purpose is to promote and protect the interests of the trade; representing, advising and supporting all aspects of Scotland’s baking industry to ensure it remains competitive and equipped for growth.

It does this by providing the widest possible range of benefits that help its members sustain and grow their businesses including: skills development, technical information and assistance, competitions, sector intelligence, legal advice, financial discounts, and social and business networking.

Scottish Bakers manages both The World Championship Scotch Pie Awards and The Scottish Baker of the Year Awards each year to recognise and celebrate excellence in the sector.

But, most importantly, Scottish Bakers belongs to its members, it is there for their benefit and is proud of its motto, ‘for the good of all’.

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