NEWS | Industry Updates


Budget relief offers little respite for vending operators facing rising costs, warns AVA


The Vending & Automated Retail Association says rising employment costs, regulatory burdens and uncertainty over business rates continue to put pressure on the UK’s automated retail sector. Vending and automated retail businesses are facing mounting financial pressures despite some welcome measures in the October Budget, according to The Vending & Automated Retail Association (AVA). While the extension of the 5p fuel duty cut and VAT relief on electricity bills until July 2027 will offer some short-term support, the AVA says these measures do little to address the wider cost challenges facing operators. The 3.9% increase in the National Living Wage and National Minimum Wage will add further pressure to businesses employing staff across warehousing, logistics, machine replenishment and technical support. For small and medium-sized operators in particular, rising wages, increased employer National Insurance contributions and frozen tax thresholds are combining to drive up employment costs and squeeze already tight margins.


These pressures risk limiting recruitment, delaying investment and making it harder for businesses to grow and remain competitive. Alongside rising operating costs, the sector continues to face significant regulatory challenges. Extended Producer Responsibility (EPR) and wider packaging obligations are adding costs and administrative demands across the supply chain. The proposed ban on selling high-caffeine energy drinks to under-16s could also have a substantial financial impact, with the AVA estimating potential industry losses of almost £43 million. The introduction of Deposit Return Schemes across the UK presents further operational and financial challenges. The AVA has also highlighted uncertainty surrounding the Government’s proposed business rates reductions for many high street retailers. Although the measures may benefit traditional shops, the association says it is essential that vending and unattended retail businesses are not overlooked, particularly where machines, micro-markets and other automated retail facilities operate outside conventional shop premises. David Llewellyn, Chief Executive of AVA, said: “The Budget


offers some welcome short-term relief, but it does not address the cumulative pressure being placed on vending and automated retail businesses. Rising employment costs, environmental and packaging regulation and proposals that threaten sales are all adding to the financial burden on operators. “Vending is an important part of the UK’s food and beverage


infrastructure, keeping workplaces, hospitals, transport hubs and public spaces supplied around the clock. The Government needs to recognise the contribution our industry makes and ensure that support for businesses and changes to regulation take account of the realities of operating an automated retail network.” The AVA is calling for greater recognition of the sector’s contribution to the UK economy and clearer assurances that vending and automated retail businesses will be considered in future decisions on business support, taxation and regulation.


BSDA reacts to Budget announcements


The British Soft Drinks Association (BSDA) has welcomed support offered to businesses in the Autumn Budget but has called for further action. Responding to Chancellor John Healey’s Autumn Budget (28 October), BSDA director general Andy Bagnall, said: “With our members already facing significant economic headwinds, we welcome the Budget measures that provide breathing space for businesses and consumers, particularly business rates relief for hospitality and the high street. Soft drinks are integral to UK high streets, accounting for one in five convenience store purchases. “We had hoped to see movement on


the decision to apply VAT to unredeemed deposits under the UK’s Deposit Return


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Scheme, which launches in 11 months’ time. Applying VAT could divert funding away from recycling infrastructure and increase costs for consumers. The BSDA has pressed ministers on this issue for several years, and will continue to push for progress in the coming weeks. “It’s positive that the Budget made no changes beyond CPI increases to the Plastic Packaging Tax (PPT), including its rates and thresholds. The tax’s effectiveness should now be reassessed as part of a wider review of packaging policy, ensuring that it works alongside the Deposit Return Scheme, that the Packaging Recovery Notes system is overhauled, and that hospitality businesses are not paying twice for packaging waste management.”


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