Industry insights

Like last year, today’s budget once again gives little to be positive about. The 5p discount to hospitality and leisure business rates is unlikely to bring much benefit, against a backdrop of rising costs from increases to the minimum wage, and last year’s hikes in employer National Insurance contributions. Whilst we wait to see the full details, as a business, the increases on business rates to large warehouses and the removal of National Insurance relief on salary sacrifice pension contributions over £2,000 will have a significant impact on the costs within our supply chain. It is clear that the government still does not fully recognise the importance of business growth or the vital role that hospitality, foodservice and wholesaler sectors play in our economy and society, and the acute nature of the challenges they face.

The latest figures from UK Hospitality reveal that of the 164,641 job losses across the UK since last October’s Budget, almost 89,000 have come from hospitality alone. This means our sector accounts for more than half of all redundancies – a stark reminder that pubs, restaurants, bars and hotels are being pushed beyond breaking point. While we welcome recent government steps, such as the 40% rates relief for 2025/26 and plans to consider lower multipliers from 2026, these measures are not enough to offset the tax increases and rising costs that have disproportionately hit hospitality.

We support UK Hospitality’s call for urgent action at the November Budget. The Chancellor must urgently consider applying the maximum discount to the multiplier for hospitality properties under £500,000, pause measures that would drive up costs further, and bring forward targeted reliefs to safeguard jobs. Without decisive intervention, more businesses will close and communities across the UK will lose not only vital local venues but also the livelihoods they sustain.

At Bidfood, we welcome the government’s commitment to building a more secure, sustainable, and resilient food system. Now more than ever, it is vital to rethink how we produce, manufacture, distribute, and sell food to create a fairer system for all. Addressing today’s urgent challenges will require real commitment and a coordinated strategy that ensures food is secure, nutritious, sustainable, and affordable for families now and for future generations. We are proud to continue playing our part in shaping a food system that works for people, businesses, and the planet.

As one of the largest suppliers to the pub sector, we stand firmly behind publicans as we approach the Autumn Budget.

We urge the government to urgently address the severe challenges currently faced across hospitality, and in particular within the pub industry.

Publicans need a fairer and more balanced tax framework – one that enables them to turn sales into sustainable profits, attract ongoing investment, and safeguard vital community spaces.

The pub sector continues to provide an essential pathway into employment for young and talented people. To protect these opportunities, and the jobs and working hours they create, we call for meaningful policy change from government.

You may have seen that in recent months meat prices in the UK have risen sharply, especially beef which is up 30 to 40% compared to last year. This is due to a combination of factors including reduced supply, increased demand globally, higher costs such as National Minimum Wage (NMW) and National Insurance (NI), weather issues, feed and fuel costs, and post-Brexit tariffs.

Due to these challenges, especially the rise in NI and NMW, it is clear the farming industry needs support and investment to survive. Previous removal of inheritance tax benefits and subsidies has hurt farmers, evidenced by over 30 farms being forced to close in Scotland alone over the past 12-18 months. There is hope for support in the Autumn budget, but for now it remains a volatile environment.

As a key supplier to the UK hospitality sector, Bidfood is voicing the concerns shared across the industry regarding the planned removal of key hospitality roles from the Skilled Worker visa route from 22 July 2025.

Roles such as chefs, restaurant and catering managers, and hotel and bar supervisors are vital to the success and smooth operation of hospitality businesses. Removing these roles from eligibility risks worsening the already critical labour shortages faced by venues across the country.

We urge the government to consult closely with hospitality leaders on this issue as, if implemented, this policy change undermines the sector’s ability to recruit essential talent at a time when the industry is still grappling with many challenges.

It’s important to remember that the hospitality industry plays a vital role in the UK economy and needs a workforce strategy that recognises its value and supports its future.

We’ve seen the recent reports highlighting concerns over reduced portion sizes and lower meat content in school lunches, and we understand the concern around this. School catering teams are facing unprecedented pressures, from rising food costs and tight budgets to increasing dietary and sustainability demands, resulting in difficult decisions in school kitchens across the country.

While changes to meal composition can sometimes reflect wider economic pressures, our goal remains to support schools in providing children with meals that are nourishing, satisfying, and aligned with school food standards.

We continue to advocate for greater investment in school catering and are actively collaborating with local authorities and partners to ensure that every child receives the quality meals they deserve.

I’m delighted by the UK government’s recent announcement that an additional half a million children will receive free school meals.

Bidfood and I have long campaigned for the expansion of healthy, free school meals, and I’m proud to see the collective efforts beginning to deliver real, positive change. This is a promising step towards the support we’ve all been hoping for.

It is also pleasing to see the School Food Standards is set to be updated to align to the latest guidance on nutrition, which along with our expert nutrition team, we will look to engage with the government on any changes that are implemented.

That said, while this news is both welcome and encouraging, it’s crucial that we now see a fundamental increase in funding to ensure the long-term sustainability of this vital service. I look forward to Bidfood continuing to be a strong voice in this important conversation.

Recently the government has proposed changes to the Soft Drinks Industry Levy (SDIL), which was originally implemented in 2018. These proposed changes include lowering the 5g sugar threshold and removing the exemption for milk-based drink and milk substitute drinks such as milkshakes and iced coffees.

The SDIL has achieved great success so far, with 46% of the sugar being removed by the drinks in scope already, and we hope that future changes to the levy will continue to incentivise industry and reduce sugar consumption further.

However, tackling obesity requires a multi-faceted approach. Whilst a sugar tax has been seen to be successful for soft drinks so far, it does not mean it would have the same success if applied to other food types. Like voluntary industry programmes, restrictions on less healthy foods and education for consumers may yield better results.

The Extended Producer Responsibility Legislation (EPR) has been introduced to hold producers responsible for paying the full cost of managing and recycling the packaging waste from their products. However, although the principles of EPR make sense, some of the practical applications are much less well thought through.

EPR has been years in planning, but even now we do not have confirmed rates that will be applied for the charges applicable to businesses for products that could be deemed relevant for street bin or house hold waste.

Businesses predominantly operating through B2B channels are expected to pay EPR fees on all products sold as it cannot be determined whether these are sold through B2B or B2C channels. However, this is likely to place an incorrect charge on B2B businesses, such as wholesalers, who may in turn be forced to increase prices.

It is disappointing that although we have raised these issues with DEFRA, they seemed uninterested, taking the view that these are minor issues in the context of the wider picture.

For more information on EPR, click here.