Last month, the Vending and Automated Retail Association (AVA) issued a warning to the government over the potential impact of recent budget changes on small and medium-sized enterprises (SMEs) within the vending sector.

In an open letter to the Chancellor of the Exchequer, AVA expressed concerns about the financial strain resulting from changes to Employer National Insurance Contributions (NICs), alongside increased national minimum wage and living wage levels. The industry predicts these adjustments could add £39 million in additional annual costs across the sector, threatening jobs, businesses and overall economic stability.

“Our industry is predominantly made up of SMEs, many of which employ fewer than 50 people,” the letter states. “For individual businesses, the changes will add over £100,000 in costs – an unsustainable burden at a time when many are already struggling with rising costs for fuel, energy, ingredients, transport and shipping.”

David Llewellyn, chief executive of AVA, warned that the combined pressure of these new costs could lead to widespread job losses, business closures and inflationary price hikes. The situation is particularly challenging for an industry reliant on long-term contracts, where passing on these additional costs to clients is often not an option.

While acknowledging the government’s focus on improving public finances and supporting economic recovery, the trade association emphasised that the proposed NIC changes disproportionately affect lower earners and could undermine flexible working arrangements.

“We fully support the ambition to deliver inclusive growth and economic stability,” the letter continues, “but these changes threaten to stifle the very businesses that underpin employment and opportunity across the UK.”

AVA has urged the Chancellor to reconsider the NIC changes and explore alternative measures to support economic recovery without jeopardising the future of small businesses.

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