Why fish and chip shops could disappear from high streets

0

The Russian-Ukrainian war and soaring inflation could bankrupt businesses, fish and chip shop trade body warns

For many people across the UK, it’s a Friday night ritual to hit up the local fish and chip shop.

Register to our NationalWorld Today newsletter

However, many of these businesses are under threat due to the Russian-Ukrainian war and soaring inflation.

So why exactly are fish and chip shops struggling – and what can be done to stop them disappearing from UK high streets?

Are we about to say goodbye to the local fish and chip shop? (photo: Getty Images)

Why are fish and chip shops struggling?

All food and beverage companies, from producers to retailers, are grappling with inflation and the other repercussions of the war in Ukraine.

The situation is particularly serious for fish and chips for many reasons.

Everything from the fish they sell to the energy they need to fry haddock and potatoes has either risen in price or had its supply compromised.

Here is an overview of the challenges facing the sector:

Fishing vessels are starved of sea prizes due to soaring fuel prices (Image: Getty Images)

Increase in the cost of fuel for boats

The problem starts with the very boats that catch the seafood fish and chip shops need.

The fuel they need to take to sea has exploded due to the Russian-Ukrainian war.

Seafish – the public body that supports the seafood industry – told NationalWorld that year-to-date marine fuel prices have doubled from the average price seen in ports last year. .

Between February and June 2022, the price rose by almost 70% on average in the UK ports that Seafish says it is monitoring.

The National Federation of Fishermen’s Organizations (NFFO) – the trade body representing most UK fishermen – illustrated the impact of these cost increases through examples provided by its members.

Fishing crews are seeing their income plummet (Image: AFP/Getty Images)

In one case, a ship landed for £44,176 worth of seafood but had to pay a fuel bill of £29,068.

This left the boat’s eight crew earning £1,516 between them, or £189 each.

Another example is that of a ‘coastal’ vessel (which stays close to shore), which landed a catch worth £8,706 after eight days of fishing but had to pay a fuel bill of £5,234 £.

The crew of this ship brought home just £927 between them for over a week’s work.

The NFFO describes the current situation as ‘unsustainable’ and says fishermen face a ‘cruel choice’ whether to go out to sea – or do so only ‘to make a loss’.

The cost of fuel has contributed to the rise in fish prices, but the sanctions against Russia – or at least the threat of them – have also driven up the prices of French fries.

Following the invasion of Ukraine, the British government announced that it would impose a 35% tariff on Russian whitefish – an action it halted but which it says has not been “delayed only while we sort out some technical details”.

NationalWorld has approached the government for clarity on the status of these tariffs.

Russia controls 45% of all white fish in the world – that is, fish-and-chip shop favorites like cod and haddock – so prices were likely to rise without tariffs.

The UK is not self-sufficient in the fish used by fish and chips (Image: Getty Images)

Marine fish data also shows that the UK is far from self-sufficient in these fish species.

UK fishermen caught 47,000 tonnes of cod and haddock in 2020 (the latest year for which data was available), but imported 430,000 tonnes of whitefish from countries including Russia.

At least 50% of these imports could come from Russia, estimates Seafish.

Even though the tariffs have not yet been introduced, their mere threat has already had an impact.

Indeed, data from the government agency Marine Management Organization shows that prices for most whitefish species have increased from 2020/21 average prices in the first quarter of 2022.

Increases were 34% for cod and 45% for hake, although haddock prices remained relatively stable.

UK Fisheries – a long-distance fishing firm specializing in supplying fish and chip shops – said the introduction of tariffs ‘would have a huge and negative impact on the fish and chip shop business’.

Soaring cooking oil costs

Another key ingredient in fish and chip shops is the oil they use to fry fish and potatoes.

Since Ukraine is one of the largest sunflower oil producers in the world, global markets are already worried about how much the country will be able to harvest given the war.

The price of cooking oil has skyrocketed since the Russian-Ukrainian war (Image: Getty Images)

Prices had even been rising since the start of the Covid pandemic, says Seafish.

Costs of imported sunflower oil have tripled from about $700 per ton in March 2020 to $2,250 per ton in March 2022, according to his figures.

Skyrocketing energy bills and VAT

According to the NFFF, fish and chip shops are also being hurt by high energy costs.

The organisation’s chairman, Andrew Crook, said many of its members have suffered from the lack of a commercial equivalent of the Ofgem energy price cap.

He says he has heard of bill increases of “up to 500%” for some fish and chips.

Along with this pressure on bills, Mr Crook criticized the government’s decision to reduce VAT to 20% for hotel businesses in April.

The rate of tax paid by restaurants and eateries has been temporarily reduced to 12.5% ​​in 2021 to help businesses manage the costs of the Covid pandemic.

National Fish Fryers Federation chairman Andrew Crook called the UK’s VAT system ‘outdated’ (Image: AFP/Getty Images)

“While in the eyes of HMRC we are just collecting VAT from the public and passing it on, in reality it is out of our margin in normal times and certainly with the inflationary prices we are seeing now,” Mr. Crook.

The other problem the NFFF says it has with the VAT is that it treats food vendors differently depending on whether their products are served hot or cold.

While fish and chip shops pay full VAT, businesses selling a roll of dough or sausage that has been allowed to cool and is not sold with the intention of being eaten ‘hot’ do not pay VAT.

“The system is outdated, unfair and encourages fraud. We must continue to fight for reform,” says Crook.

NationalWorld has approached the government for comment on this issue.

What do cost pressures mean for fish and chip shops?

Reacting to all these cost pressures, NFFF’s Andrew Crook told NationalWorld that this amounts to a “perfect storm” for fish and chip shops.

“Fish and chips is a resilient industry, so the industry will survive – but I think we’re inevitably going to see some businesses fail.

The closure of fish and chip shops could have a human cost, warned Andrew Crook (Image: Getty Images)

“For someone running a business, it’s more than just a job – you put your heart and soul into it and it becomes a big part of your life.

“If this business fails, it’s more than just a job loss; it weighs heavily on you, so there’s definitely a human aspect to it.

Mr Crook says we are likely to see the first business bankruptcies when VAT bills and quarterly rents are due, saying those “with the most cash reserves” will be the ones who survive.

It will be when the VAT bills and quarterly rent bills arrive that some of these businesses will be broken, it is now a question of who has the most cash reserves and who will survive.

Can fish and chips be saved?

Andrew Crook thinks the industry will survive, but admits there isn’t much that can be done right now to support his sector.

“Most of what happens is beyond anyone’s control, because the [price] increases are a global problem.

“But we were hoping the government would be brave enough to reform the outdated hospitality VAT system.

“I feel that my members [the] the government does not like small businesses.

“How sad would it be if all the main streets looked the same? We need reform and fast before small independents become an endangered species.

The government was approached to comment on its attitude towards small businesses.

Share.

About Author

Comments are closed.