As food price inflation in the hospitality industry approaches 22% once more, UKHospitality is advocating for measures that allow businesses to exit energy contracts negotiated during the height of the energy crisis. With a recent survey revealing that energy costs are up 80% year-over-year and nearly half of businesses that signed a contract during the height of the energy crisis dreading business failure, energy remains a key driver of inflation.
As the cost of doing business continues to rise, hospitality businesses will have no alternative but to pass on these price increases to customers. Unfortunately, this causes inflation.
Kate Nicholls, chief executive officer of UKHospitality, stated, “If the government is to achieve its goal of halving inflation, it must address the ever-increasing cost of doing business.”
“We’ve observed today that food price inflation in the hospitality industry has increased to nearly 22%.” Farmers, food producers and manufacturers, and hospitality businesses are being negatively impacted by rising energy prices, and inflation will become entrenched unless businesses are able to terminate energy contracts that were fixed at rates far above the current market rate.
“It is my expectation that the Chancellor discussed the urgent need for action with Ofgem during his meeting with regulators today, as there has been little in the way of action thus far.
“While its evaluation of the non-domestic energy market is positive, it has been ongoing for at least six months and no conclusions have been reached. The severity of the situation confronting hospitality businesses necessitates a far greater sense of urgency on the part of the regulator, whose inaction has led to business failure, as we have repeatedly warned.
“If Ofgem is unable to act and intervene in the energy market, compelling suppliers to renegotiate with customers, then I would urge the Government and the CMA to step in, conduct a thorough investigation of the market, and take meaningful action on behalf of hard-working businesses,”
Source: traveldailymedia