Low Pay Commission is urged by UK's leading wholesale body to take full account of business cost pressures when making recommendations on future National Living Wage (NLW) and National Minimum Wage (NMW) rates.
Giving evidence to the Commission’s consultation on future minimum wage rates, Food and Drink Wholesale UK (FWD) highlighted the challenges facing food and drink wholesalers as they continue to absorb rising employment costs alongside increases in Employer National Insurance Contributions, business rates and other regulatory costs such as extended producer responsibility and the upcoming deposit return scheme.
While reaffirming its support for fair pay, FWD stressed that wholesalers want to reward and retain their employees by paying competitive wages, with many businesses paying above the statutory minimum wherever possible.
However, the cumulative impact of rising employment costs and wider operating pressures is making this increasingly difficult, limiting businesses’ ability to invest, recruit and grow.
FWD said future recommendations should be evidence-led, affordable for businesses and provide greater certainty to support long-term investment, recruitment and productivity.
FWD also highlighted the importance of protecting employment opportunities for younger workers, warning that any future changes to minimum wage rates should be carefully phased and informed by evidence to avoid unintended consequences for entry-level recruitment.
At a time when the government is focused on reducing the number of young people who are not in education, employment or training (NEET), maintaining accessible routes into employment will be critical for both young people and employers.
Lyndsey Cambridge-Wilson, Head of External Affairs at Food and Drink Wholesale UK, said: “Food and drink wholesalers recognise the importance of ensuring workers are paid fairly and, wherever possible, our members want to pay above the statutory minimum to attract and retain talented employees.
"However, businesses are operating in an increasingly challenging economic environment, where the cumulative impact of rising employment costs and wider regulatory burdens is putting significant pressure on already tight margins.
“Our evidence to the Low Pay Commission demonstrates that successive increases in employment costs, alongside a range of other business pressures, are making it more difficult for wholesalers to invest, recruit and grow.
“The Commission’s recommendations should continue to balance fair pay with business affordability, competitiveness and employment opportunities. A predictable and evidence-led approach will give businesses the confidence to invest in their people, maintain rewarding career pathways and continue supporting the retailers, hospitality businesses and public services that rely on wholesale.”
Food and drink wholesalers directly employs around 77,000 people and underpins resilient food supply chains nationwide