A state of financial distress has gripped up to 7,803 UK food and drink firms after the National Living Wage was introduced.
It was an increase of 22% in comparison with six months back when this regulation was introduced on April 1, 2016. Begbies researched into 97,342 businesses which had undergone financial difficulties after the regulation standardising wage for workers aged above 25 years came into effect.
Julie Palmer, who is a partner at the firm, was reported saying that many food and beverage firms are struggling to absorb these costs and it seems this new legislation has put additional stress on the ability of the firms to compete in the marketplace globally. Apart from being forced to reduce staff numbers, businesses have reduced bonuses, passing on the increased cost to consumers in order to counter Living Wage cost.
According to the Food and Drink Federation (FDF), its members had not experienced financial pressure triggered by the introduction of the new regulation.