Incoming wage cost hikes and future inheritance tax changes are damaging domestic production and will hurt consumers, according to apple and pear growers
Government policy to increase employment costs will hurt consumers and damage domestic fruit production, says British Apple and Pears Limited (BAPL).
In a statement ahead of pending National Insurance (NI) and National Living Wage (NLW) rises next month (6 April), BAPL has warned that the combined wage hike will have to be passed on to consumers.
The grower group added that these, and future, government policies had further eroded producer confidence and hit their longer-term investment plans, putting the future of domestic apple and pear production at risk.
Quoting Andersons Farm Consulting figures, BAPL said the median cost of producing a kilogram of apples will go up by 7p (from £1.33 to £1.40) following April’s NI and NLW hikes.
“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,” revealed Ali Capper, executive chair of BAPL.
“Our farmers are ready and willing to grow more healthy, environmentally-friendly and delicious British apples and pears to help reduce our reliance on imports. We just need the government to recognise that and stop putting barriers in our way.”
Continued pressure on British apple and pear growers is also impacting confidence and longer-term investment plans, she added.
Following Labour’s October 2024 Budget announcements, 43 per cent of BAPL members said they felt less confident than a year ago and were therefore holding back on orchard investments.
In another post-Budget survey, growers and grower packers were asked about their fruit storage investment plans. Four in five (81 per cent) of growers said they were not planning any new storage faciliities in the next five years due to low returns, lack of confidence and greater financial uncertainty.
“The October budget created two challenges for growers – one on wages and the other on proposed inheritance tax (IHT) changes,” said Capper.
“Today, if growers follow government advice to try to mitigate the tax, they face huge bills for lawyers and accountants. That’s money that should be being spent on new orchards, renewable energy and automation. This is a tax that prevents investment and growth in businesses.
“There is a genuine crisis of confidence in the British apple and pear industry,” Capper continued. “It really saddens me that as a direct result of government policy, growers feel unable to invest in the future. New apple and pear stores are expensive, but it’s an investment risk that our growers have been willing to take in the past – not any more. The industry is facing an investment crisis that risks the future supply of British apples and pears.
“I really hope that the government will take these warnings seriously. We urgently need policies that will shore up investment and growth in the sector before we start to lose more apple and pear orchards from the British countryside.”
British Apples & Pears Limited (BAPL) is a grower-funded, not-for-profit organisation that represents all commercial apple and pear growers in the UK.
