Food inflation is rising, as noted by British Apple & Pears Limited (BAPL), the UK's fruit grower association. This is linked to government policies increasing employment costs. From April 6, 2025, British apple and pear growers will face rises in employers' National Insurance and the National Living Wage.
Andersons Farm Consulting projects these changes will elevate the median cost of producing a kilogram of apples by 7p. Employment costs now constitute half of the total production cost for British apples and pears. Ali Capper, executive chair of BAPL, stated, "Growers margins have been stripped to the bone, so these increases in the cost of producing British apples and pears will have to be passed on to retailers, who have already said they will have to pass on wage rises to consumers."
Capper also highlighted the global climate crisis and geopolitical volatility, emphasizing food security as a priority. The UK climate is suitable for growing apples and pears, yet government policies are seen as barriers.
In late 2024, BAPL surveyed members about their future confidence. Only 17% felt more confident than the previous year, with 43% feeling less confident. This lack of confidence impacts orchard investments, with 81% of growers not planning new storage facilities in the next five years due to low returns and financial uncertainty.
Ali Capper expressed concerns over proposed inheritance tax (IHT) changes affecting farm assets. "Farm assets such as land, worker housing, cold storage, and packhouses are capital employed and should not be taxed on the death of an individual." These changes may hinder investment in new orchards and renewable energy.
Source: Hort News