Production of toilet paper and food wrap ‘could be threatened by soaring energy costs’
Industry bosses have warned that toilet paper and food wraps could be hit by soaring energy costs.
To protect their finances, companies may have to restrict the production of paper-based products.
The head of the Confederation of Paper Industries has called for a “temporary winter cost containment measure” to help production as costs in the sector “explode”.
Similarly, the UK ceramics sector said high energy costs could force companies to halt production.
READ MORE:Gas and electricity bills ‘could rise by 30% next year’
It comes after wholesale gas prices hit a record high on Wednesday, although they fell after Russian President Vladimir Putin said the country would stabilize the market.
Andrew Large, chief executive of the Confederation of Paper Industries, said its members were “very, very badly affected” by the cost increases.
He told BBC Radio 4’s Today programme: “They are seeing their costs skyrocket.
“It hurts their profitability and in some cases causes them to manage their production rates so as not to expose themselves to the highest costs.”
He said there was no cap on business energy costs and called for a “temporary winter cost containment measure to try to contain these costs so that these very, very important industries to British society can continue to operate”.
Mr Large said rising costs were having a negative impact on a wide range of important UK sectors, including food packaging, toilet paper and the production of sterile medical packaging.
Laura Cohen, chief executive of the British Ceramic Confederation, told the BBC that energy prices were affecting the viability of businesses.
She said: “As high prices continue, more members are likely to be forced to shut down production due to excessively high energy costs.
“But we are also concerned that prices reflect market views on the physical availability of gas during the winter.
“In the event of a national supply shortage, our members are at the top of the list of being forced out of the gas grid while households are last, and this can happen at very short notice.
“A forced rapid shutdown poses a very high risk of serious damage to brick kilns, which can be 100 meters long, operate at over 1,000°C, and can threaten the viability of the business.”
It’s not just businesses that will be affected – Britons could be hit by bills rising by 30% next year.
Research agency Cornwall Insight has predicted further volatility in gas prices and the potential collapse of even more suppliers could push the energy price cap to around £1,660 this summer.
The forecast is around 30% above the record price cap of £1,277 set for winter 2021/22, which started in early October.
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