Analysis estimates significant increase in production costs and retail prices following changes to national living wage and national insurance

Ali Capper has called for support from retailers and government following the challenging budget announcements

Ali Capper has called for support from retailers and government following the challenging Budget announcements

A new analysis of costs facing British apple and pear growers indicates that food price rises in 2025 are now an inevitable consequence of recent government policy.

The study, commissioned by industry body British Apples and Pears (BAPL) and carried out by Andersons Farm Consulting, shows that the latest Budget announcements regarding the national living wage and national insurance will increase food prices in 2025.

This will push up food price inflation, and according to the research, it is likely we will not see the forecast growth in general economy.

The analysis estimates that 2025 will see a 7p increase in the median cost of producing a kilogram of apples (from £1.33 to £1.40).

“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,” explained BAPL executive chair Ali Capper.

“Shoppers will end up paying more for their fresh apples and pears. Food price inflation is a direct consequence of government policy. Labour costs are about half of the total costs of producing British apples and pears, and growers are facing a 10 per cent increase in that cost alone from the national living wage and employer national insurance increases.

“These changes will impact growers, retailers, shoppers and could even tip the country into recession as consumer demand declines in the face of price rises.

“On top of that, growers are now facing the costs associated with the newly proposed changes to inheritance tax. The costs associated with tax planning will also have to be priced in for the future.”

To mitigate some of these negative impacts, BAPL is calling for retailers to:

  • Treat suppliers fairly, recognising the levels of inflation growers face
  • Invest in British fresh produce and long-term relationships with UK suppliers

And the industry body is calling for government to:

  • Expedite their policy work on fairness in the supply chain
  • Reverse the IHT proposals
  • Provide five-year certainty on the seasonal worker scheme, so that growers can plan for the future

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