UK food and drink manufacturers must look to energy efficiency to help prevent rising energy costs from putting jobs at risk, according to a survey of 100 leading decision makers in the industry.
The survey, conducted by npower Business Solutions, found that rising energy bills from the Government’s electricity market reform (EMR) programme are forcing more than a quarter of decision makers to consider cutting jobs or freezing recruitment.
The costs of the EMR, which aims to shift energy generation towards low carbon sources, will be appearing on the electricity bills of large consumers for the first time from April 2015.
Government energy policy is also expected to increase costs for small and medium sized businesses significantly over next 15 years.
Overall, three quarters of those surveyed by npower reported that energy costs have now become a key factor in making decisions to expand their business.
With rising energy costs becoming an increasing concern for manufacturers in energy intensive sectors such as food and drink, experts are calling for energy management to be prioritised as a boardroom issue.
According to npower’s survey, 64 per cent of food and drink manufacturers have already invested in energy efficiency measures, with a further 38 per cent planning to generate their own electricity.
Wayne Mitchell, director of markets and innovation for npower Business Solutions, said: “This research clearly proves that energy management should be one of the top priorities of every company board.
“The good news is that a number of businesses appear to be increasingly serious about investing in effective energy management; 64 per cent of businesses have already taken action. That still leaves 36 per cent of businesses who - with the right approach - should be more than able to offset any additional charges [from energy bills].”
‘Focus on energy efficiency’
Stephen Reeson, head of climate change and energy policy at the Food and Drink Federation (FDF), added: “A strong focus on energy efficiency management and investment in our sector will deliver energy cost savings and help counter risk.
“Under the FDF’s Climate Change Agreement, we reduced our energy consumption per tonne of product by over 20 per cent, meaning energy bills were around £300 million lower than they might have been otherwise. We expect further savings as we work towards our 2020 target of a further 18 per cent improvement in energy efficiency.”