The Cold Chain Federation has urged the Secretary for Business, Energy and Industrial Strategy Kwasi Kwarteng to prioritise cold storage operators in any plans to protect UK industry from ill effects of soaring energy prices.
The Federation represents the businesses across the UK which store and move fresh and frozen food and other goods. It has warned of the risk that without support some cold chain businesses could fold under the massive increase in electricity costs, which would have serious consequences for the continuity of the food supply chain.
In a letter, the Cold Chain Federation has asked the Business Secretary to include cold storage operators in any support packages and to treat cold storage as a priority in the event of an energy shortage due to its critical role in sustaining food and pharmaceutical supply chains.
The letter stresses that storing food safely and reliably at controlled temperatures requires constant energy use and that some cold storage businesses are now seeing huge increases in the cost of their electricity, in some cases 50-200%. This could add millions of pounds to the annual running costs of larger cold stores and threatens the existence of individual businesses, further destabilising and reducing the capacity of an already fragile food supply chain.
In situations where increased costs could be passed on through the supply chain, this would amplify the food price inflation which is already anticipated due to increases in labour costs throughout the food supply chain.
“The challenges of the past two years have shown time and time again why the cold chain is so crucial for food supply,” said Tom Southall, Policy Director at the Cold Chain Federation. “Cold storage operators are resilient, experienced and incredibly hard working but the soaring electricity costs on top of the labour shortage, Brexit and the pandemic is creating an overwhelming burden. If the crisis continues and government needs to step in to prevent widespread failures in energy intensive industries, cold storage must be a high priority or we will all feel the effects of major disruption to fresh and frozen food supply.”