Thursday, 22 March 2012

2012 budget and your food bill

All of my channels of news are filled to bursting point with one word: Budget. While the financial types are frantically forecasting for the coming year, my thoughts turn, predictably, to my belly. If you’re wondering how the newly announced budget will affect how much you spend on food, read on.

I’ve always thought that VAT – particularly when it comes to food - is a complex concept. You only need to look to the McVities Jaffa Cake Biscuit controversy to realise that the supermarket is a veritable minefield when it comes to tax. You can release your death grip on the biscuit/cake tin for the moment though as the budget has savoury morsels in its sights for the moment. Many large supermarkets now have a hot counter where you can select a rotisserie chicken or hot sausage roll. Several times, I’ve lost The Boy only to find him rooted to the spot, transfixed by the teasing sight of juicy hot poultry spinning away like a baby staring intently at the whirrings of its wind-up mobile.

Currently, supermarkets are able to sell hot food – like the aforementioned chooks and pastry-clad animal offcuts – sans tax because they claim that they’re not designed to be eaten immediately and instead keep the produce hot to improve its appearance. The government plans to tighten up the loop hole that allows this; basically, if anything is sold above “ambient” air temperature, the government wants a slice of the price. The only exception to this rule is freshly baked bread. Although retailers have refused to speculate on future price rises, many expect that they will pass the extra costs on to consumers. This might also cause headaches for sandwich outlets that sell their offerings fresh or toasted as the hot variety – despite having the same ingredients – will cost more. Greggs are up in arms.

For those that like to live on chemicals, sports nutrition and body building drinks are going to be grouped with fizzy drinks to make them VAT-payable. This doesn’t bother me too much for two reasons. Number one: I’m not a huge fan of those types of drinks unless they’re used as a mixer (protein milkshake white Russian anyone? No!?). Number two: I’d rather eat real food than substitute them with the adult equivalent of formula milk.

Alcohol duty will remain the same, much to the disappointment of pubs and bars everywhere. There is no planned change to the escalator which rises the duty paid on beers, wines and spirits at the rate of 2 per cent above inflation until 2015. The British Beer and Pub Association (BBPA) claims that this will lead to the average cost of a pub pint of lager rise to £3.17 and that beer tax has risen by 42 per cent since the policy was introduced four years ago.

Until this point, readers who don’t indulge in alcohol, protein gloop or ready-cooked chicken might have been feeling smug however don’t get too complacent yet. Filling your car might well be painful now but fuel duty is set to rise by 3p (per litre?) in August which will have obvious knock on effects to the cost of running a vehicle. However, this is likely to hit households twofold in a financial double whammy as fuel costs are linked to food costs. All of the food that we buy in the supermarket is transport by road at some point during its journey to the shelf so as fuel prices rise so do distribution costs – a bill that is picked up by the consumer.

How will the budget be affecting what you eat and drink? Let me know your thoughts on the 2012 budget.

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