A tough winter is coming up around the world, but in the UK it looks like it’s going to be especially tough. The uncontrolled price escalation that the country is experiencing could cause the British to run out of one of their favorite dishes, the famous fish and chips. The situation is so serious that the sector is on the verge of extinction.
Last May, the National Federation of Fish Friers (NFFF) estimated that as a result of delays in the supply chain and the war in Ukraine. Just four months since then, the country’s inflation rate – and it could reach 22% in January, according to Goldman Sachs – and the ongoing cost-of-living crisis have made things even more complicated. “This is potentially the worst crisis the industry has ever faced,” in the words of Andrew Crook, president of the organization.
There are mainly two reasons: these establishments operate with very narrow margins and are highly dependent on Russian and Ukrainian exports. In the case of fish, up to 40% of the cod and haddock (another of those used as an ingredient) that the sector imports come from Russia, so their price has been directly affected by the armed conflict. To this is added, in addition, the additional tariff of 35% imposed by the United Kingdom Government on imports of white fish caught in Russian waters as a sanction. All this has meant that almost 20 kilos of fish have gone from costing 70 pounds (about 81 euros) to 270 pounds (more than 311 euros), according to a member of the sector to CNBC.
On the other hand, almost half of the sunflower oil used to fry fish and chips comes from Ukraine, the world’s largest producer and exporter. However, the Russian invasion has reduced Ukrainian ingredient exports by 15%, to 4.49 million tons, from September 2021 to August this year, according to data from the APK-Inform consultancy collected by Reuters.
Two factors which, combined with rising energy prices, are choking UK fish and chip shops. According to David Wilkinson, owner of The Blue Fin restaurant in Skegness, Lincolnshire, his business’ electricity bill has risen 60% so far this year.
Although the owners do everything possible so that customers do not notice this general increase in prices, in the end it is making itself felt in prices. A year ago, the average price of some fish and chips was 7 pounds (about 8.30 euros) and now it is around 8.50 pounds (10 euros). That is, it has become more expensive by 21%. However, they cannot raise prices much higher or they will start losing customers.
Faced with this situation, British restaurants have several options. As regards the supply of fish, one possibility would be to import it from Scandinavia. The National Federation of Fish Friers itself has recently traveled to Norway to see if it is a viable alternative. As for sunflower oil, UK fish and chip restaurant owners could substitute it for palm oil, the price of which is falling fairly rapidly due to increased demand for other types of vegetable oil, policy changes Malaysia’s export market – it has lifted the ban imposed at the beginning of the year – and the impact of inflation on demand. Also, some owners have already opted to open fewer days a week, in an attempt to reduce costs, and the NFFF is pressing the British government so that VAT on small businesses does not return to 20% in April, but remains the reduction applied as an aid measure during the pandemic.
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