This, coupled with recent wet summers and harsh winters, has seen sales drop alarmingly for some ice cream sellers, and there is a fear that many could be forced out of business.
The Ice Cream Alliance is calling on the chancellor of the exchequer to classify ice cream as a food rather than a luxury item and reduce its VAT loading, which is currently 20%.
Ice Cream Alliance CEO Zelica Carr said: “The ice cream industry plays a major part in the economy of the UK, with sales of around £1.3bn a year, but many businesses are fearing for the future after being hit by a succession of swingeing prices increases.
“I have written to Mr Osborne asking him to reconsider the classification of ice cream as a luxury product and reclassify it as a food, and reduce the VAT levied on it to zero. Ice cream plays an important, if often under-appreciated, role in British life. It provides an affordable feel-good factor which, in today’s economic climate, is sadly lacking for many families.”
In her letter, Carr said a reduction in VAT on ice cream would “be welcomed by a struggling ice cream industry and would have a significant and positive impact upon the spirit and morale of the nation”.
The ice cream industry is reeling from massive price increases that has seen sugar rise from £460 a tonne in January to £800, with fears that it could rise to £1,400 in June. Skimmed milk powder has increased from £1,800 per tonne in January to £2,900, while cocoa powder has virtually trebled from £1,250 per tonne to £3,600.
Carr added: “Unfortunately, faced with such substantial increases, many ice cream manufacturers and sellers will have to pass at least part of the increase on to customers, but this rise could be cancelled out if VAT on ice cream was reduced.”
Source: The Cream Alliance
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