Why fish and chips shops could disappear from high streets

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The war between Russia and Ukraine and skyrocketing inflation could shut down businesses, the Fish and Chip Shops Trade Association has warned

For many people across the UK, going to the local fish and chip shop is a Friday night ritual.

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However, many of these companies are threatened by the war between Russia and Ukraine and skyrocketing inflation.

The situation has led to predictions from the chippy trade organization National Federation of Fish Friers (NFFF) that a third of the country’s fish and chip shops could close if things continue as they are.

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

Could we wave goodbye to the local fish and chip shop? (Image: Getty Images)

Why are fish and chip shops struggling?

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Every food and beverage company, from producer to retailer, is struggling with inflation and the effects of the war in Ukraine.

The situation is particularly acute for fish and chip shops for a number of reasons.

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

Here is an overview of the problems in the industry:

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Fishing vessels are deterred from going to sea by skyrocketing fuel costs (Image: Getty Images)

Fuel cost increases for boats

The problem starts with the boats catching the seafood fish and chip shops that need them.

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The fuel they need to set sail has skyrocketed due to the war between Russia and Ukraine.

Seafish — the public body that supports the fishing industry — told Mazic News that since the beginning of the year, marine fuel prices have doubled compared to average prices in ports over the last year.

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Between February and June 2022, the price rose by almost 70% on average in UK ports monitored by Seafish.

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

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Fishing teams see their income falling (Image: AFP/Getty Images)

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

It let the boat’s crew of eight take home a combined 1,516 pounds – 189 pounds each.

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

The crew of this ship collectively took home just £927 for more than a week’s work.

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The NFFO describes the current situation as “unsustainable” and says fishermen face “a cruel choice” to either not go to sea – or to do so “only to make a loss”.

Fuel costs have contributed to rising fish prices, but sanctions against Russia – or at least the threat of them – have also pushed up the cost of chippies.

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In the wake of the invasion of Ukraine, the UK government announced it would impose 35% tariffs on Russian whitefish – the action has been halted but says it has only been “delayed while we sort out some technical matters”.

Mazic News has contacted the government for further clarity on the status of these tariffs.

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Russia controls 45% of all white fish in the world – ie fish-and-chip favorites like cod and haddock – so without tariffs prices would likely rise.

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

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

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British fishermen caught 47,000 tonnes of cod and haddock in 2020 (for the most recent year for which data were available), but imported 430,000 tonnes of whitefish from countries such as Russia.

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

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Even if tariffs have not yet been introduced, the mere threat of them has already had an effect.

In fact, data from the government agency Marine Management Organization shows that the prices of most whitefish species increased in the first quarter of 2022 compared to the average prices of 2020/21.

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

UK Fisheries – a long-distance fishing company specializing in supplying fish and chip shops – said the imposition of tariffs would have “a huge and negative impact on fish and chip shop trade”.

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Rising cost of cooking oil

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

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With Ukraine being one of the world’s largest producers of sunflower oil, there have already been concerns in global markets about how much the country can harvest from the war.

The cost of cooking oil has skyrocketed since the Russia-Ukraine war (Image: Getty Images)

Prices have even risen since the start of the Covid pandemic, says Seafish.

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The cost of imported sunflower oil tripled from around $700 per tonne in March 2020 to $2,250 per tonne in March 2022, according to the figures.

Soaring energy bills and VAT

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According to the NFFF, fish and chip shops also suffer from high energy costs.

The organisation’s President, Andrew Crook, says many of its members have suffered from the lack of a business equivalent to Ofgem’s energy price cap.

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He says he’s heard of bill increases of “up to 500%” for some fish and chip shops.

Alongside this pressure on bills, Mr Crook criticized the Government’s decision to reset VAT on hospitality businesses to 20% in April.

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

The President of the National Federation of Fish Friers, Andrew Crook, has called the UK’s VAT system “obsolete” (Image: AFP/Getty Images)

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

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The other issue the NFFF has with VAT is that it treats food vendors differently depending on whether their produce is served hot or cold.

While fish and chip shops pay full VAT, companies selling a pie or sausage roll that has been chilled and not sold with the intention of being eaten “hot” pay no VAT.

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“The system is outdated, unfair and encourages fraud. We must keep fighting for reform,” argues Mr Crook.

Mazic News has reached out to the government for comment on the matter.

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What does cost pressure mean for fish and chip shops?

In response to all of this cost pressure, NFFF’s Andrew Crook told Mazic News it’s a “perfect storm” for fish-and-chip shops.

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

Closing fish and chip shops could cost people, Andrew Crook warned (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.

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“If this business fails, it means more than just losing a job; it weighs heavily on you, so it certainly has a human aspect to it.”

Mr Crook says we’re likely to see the first business failures when VAT bills and quarterly rents come due, saying those “who have the most cash reserves” will be the ones who will survive.

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When the VAT bills and quarterly rent bills come in to collapse some of these businesses, it’s now a question of who has the most cash reserves, who will survive.

Can fish and chip shops be saved?

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Andrew Crook believes the industry will survive but admits there is not much that can be done to support his sector at this time.

“Most of what is going on is out of anyone’s control [price] Elevations are a global problem.

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

“It feels that way for my members [the] The government doesn’t like small businesses.

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

The government has been asked to comment on its stance on small business.

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