Fears voiced over energy cost scheme
CONVENIENCE and grocery industry leaders have broadly reacted with dismay over the forthcoming changes to the energy bills support businesses will receive from government.
Under the new Energy Bill Discount Scheme, which runs for a year from 1 April, bills will be automatically deducted by up to £6.97/MWh for gas and £19.61/MWh for electricity.
But the benefits only kick in when wholesale prices reach £107/MWh for gas and £302/MWh for electricity or higher.
However, bigger energy users, such as food and drink producers, will get more help.
They will get up to £40/MWh for gas, with a price threshold of £99/MWh, and £89/MWh for electricity, with the price bar set at £185/MWh. This discount will only apply to 70% of energy volumes.
Scottish Grocers’ Federation chief exec Pete Cheema said: “The hike in energy prices that many convenience retailers will have to cope with from April will leave them reeling from shock.
“The discount on offer from the UK Government is nowhere near the level of support needed to sustain a healthy retail sector.”
Cheema voiced fears that the challenges already being caused by the cost-of-living crisis and new regulations in the pipeline could lead to huge price rises at the tills.
Pointing out that c-stores were public assets and a key driver for the economy, he concluded: “Ministers must act quickly to support our sector and recognise that many businesses will be at risk of closing the doors if this cut to support goes ahead.”
Scottish Retail Consortium director David Lonsdale added: “The substantial reduction in support will do little to alleviate the elevated cost-pressures facing grocers for displaying chilled and frozen ranges.
“Nonetheless, retailers remain committed to keeping prices affordable as possible for all their customers during this cost-of-living crisis.”
The Fed president Jason Birks echoed the sentiments and said: “This is hugely disappointing for many independent retailers. With rising energy bills, falling margins, and rising payroll costs, small businesses will continue to struggle or, indeed, cease to exist unless additional financial support is available.”
Petrol Retailers Association boss Gordon Balmer urged Chancellor Jeremy Hunt to rethink his plans and warned: “The Government’s failure to provide targeted help to sectors most in need will threaten fuel resilience in the UK.”
And while Food and Drink Federation Scotland welcomed the announcement of continued financial help, it also voiced some concerns.
Chief exec David Thomson said: “This support recognises the criticality of the food and drink supply chain and that our businesses use constant levels of energy year-round, and it should help slow record levels of food and drink inflation.
“However, we seek urgent clarification from the UK Government on why certain aspects of the food and drink supply, such as soft drinks production and coffee, are excluded from the extra help for energy-intensive industries.
“We remain in close dialogue with governments across the UK as the situation continues to evolve throughout the year, given how fast-moving the energy situation has become.”
