Inflation could close thousands of fish and chips restaurants in the UK

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Traditional dish restaurants “fish and chips” (fish and chips) from the UK are under severe pressure as prices for key ingredients — including cod and cooking oil — soar as a result of the Russian attack on Ukraine.

About a third of the country’s roughly 10,000 fish and chips restaurants could close in the next nine months, said Andrew Crook, president of the National Fried Fish Federation.

The crisis is the worst he has ever seen, he told the CNN Business International.

The trading group represents 1,200 fish and chips companies and has been around for over a century.

Crook, who owns his own shop, said prices started to rise late last year, but costs for basic ingredients have soared since late February, when Russia invaded Ukraine.

“In general, everything went up,” Crook said.

Companies across industries are struggling with rising prices as supply chain problems have been exacerbated by the war in Ukraine.

But British fish and chip stores, which traditionally operate on very tight margins, are feeling a particular squeeze due to the sector’s dependence on Russian imports.

Up to 40% of the industry’s cod and haddock come from Russian waters, and about half of its sunflower oil is imported from Ukraine, Crook said.

Companies are paying about 83% more for sunflower oil than they were in early March, according to Crook. Palm oil, a common alternative, has doubled in price.

Indonesia — the world’s biggest exporter of palm oil — began restricting exports last month to help maintain domestic supplies.

Add to that the eye-popping energy bills and skyrocketing prices for the fertilizers needed to grow potatoes.

“Fish and Chips” is one of the UK’s unofficial national dishes. The first stores opened in the 1860s and spread rapidly as the country industrialized, helping to feed factory workers, according to the trade group.

During World War II, as the government rationed other staples like tea, butter, meat, fish and chips were exempt, so important was the dish to the working classes.

Customers expect their fish and chips to be cheap, Crook said.

A year ago, he says, the average price of a common cod and chips would have been around £7. Now he estimates it to be around £8.50 – an increase of 21%.

“We’re running the risk of pricing ourselves out of the market… We’re trying to keep the increases as low as possible,” Crook said. Some have already strayed.

“I lost some regular customers who used to come every Friday,” he added.

Fears that the UK government will impose tough import tariffs on Russian whitefish have prompted companies to stock up on alternatives, further driving up the price of the Icelandic and Norwegian fish Crook buys.

The price of a crate of Icelandic cod is now £270 ($331), up from £140 ($176) last year, Crook said.

Companies like Crook’s face the arduous task of selling fish and chips to customers facing the worst cost-of-living crisis in decades.

Annual consumer price inflation hit 7% in March, its highest level in 30 years, and could reach 10% later this year, according to the Bank of England.

More than half a million small businesses in the UK – about one in 10 – plan to close, downsize or sell in the next year as many struggle to secure funding, according to a survey by the Federation of Small Businesses.

For Crook, his store’s fate is personal.

“It’s more than just a job. For many of us, we took over family businesses,” he said. “I’m second generation in the business — and you don’t want this to fail you in charge.”

Source: CNN Brasil

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