Minimum wage 'to add to costs for small food and drink firms'

Food and Drink Ireland noted that consumer price inflation for food and non-alcoholic drinks, although easing somewhat in the latest month, was at an elevated annual rate of 7.8%. 

The hike in the minimum wage will add to the costs facing small firms even as energy and commodities inflation slows, business group Food and Drink Ireland has said.   

The Ibec group is the latest business organisation to highlight the decision to raise the national minimum wage to €12.70 from €11.30, which, it said, "will lead to a significant increase in input business costs for SMEs, in particular". 

Energy prices rose in the three months to the end of September, but have fallen significantly from a year earlier, while commodity prices "have stabilised" for its member firms, Food and Drink Ireland said. It noted that consumer price inflation for food and non-alcoholic drinks, although easing somewhat in the latest month, was at an elevated annual rate of 7.8%. 

“The challenges associated with high inflation are likely to shift to increased labour costs arising from the forthcoming increase in the national minimum wage in January," said Food and Drink Ireland deputy director Jonathan McDade.

"This will pose a challenge to the food and beverage sector as it tries to manage staff retention with increased input business costs, throughout the supply chain.

"It is also worth noting that many businesses will be managing a significant transition to a Living Wage, pensions autoenrollment, and other significant labour market changes over the coming years,” he said.