Wholesalers’ energy costs soared by up to 250 per cent in October, a trade body has said.
According to the Federation of Wholesale Distributors (FWD), it means a mid-sized business could have to pay out an extra £100,000 per year.
Chief executive James Bielby said members were “exposed” to price increases given their “energy-intense heating, lighting, refrigeration and freezers”.
“With the rise in the price of energy, wholesalers whose contracts were up for renewal in October have seen their bills shoot up,” he told The Grocer.
“At a time of rising food prices, labour shortages and increasing living wage bills, that will be difficult to absorb for a 1 per cent net margin business.”
One wholesale boss described the situation as “painful”, claiming his bill had doubled.
“We don’t have any contracted prices and have missed the opportunity to do so at a useful level,” he said.
“There is only one way that this is going to impact prices and businesses.”
In response, the FWD has called on the government to support operators in the public sector who have “little opportunity” to pass on rising costs given their “inflexible contracts”.
It is calling for more frequent contract reviews, plus a system for building cost increases into contracts.
“During Covid, the Department for Education offered financial relief for businesses supplying food to schools when last-minute shutdowns meant wholesalers were left with stock they couldn’t sell,” Bielby said.
“We believe the current range of challenges facing wholesalers means similar support should be offered now to ensure continuity of supply into vital public services.”
It comes after a smoked salmon supplier to Waitrose claimed that his yearly electricity bill had risen from £200,000 to £350,000.
“We could employ six people for that,” Lance Forman, of H. Forman & Son, claimed.