The UK could face a toilet paper shortage as businesses limit production of household products in the wake of soaring energy costs hitting their finances, industry bosses have warned.
The chief of the Confederation of Paper Industries called for a “temporary winter cost-containment measure” to help companies in the sector, who are seeing costs go “through the roof”.
Andrew Large said that steep energy cost rises were impacting a variety of important sectors, including food packaging, toilet paper and the production of sterile medical packaging.
The cost of energy has been soaring in recent weeks, putting many smaller energy providers out of business as well as having a knock-on effect on the wider economy.
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Several industries have sounded the alarm, saying their business models were becoming unworkable.
The UK’s ceramics sector said on Thursday that some businesses could be forced to shut down production due to high energy costs.
The warnings came after wholesale gas prices surged to a record high on Wednesday, although they dropped back after Russian president Vladimir Putin said his country would stabilise the market.
Large said the members of the Confederation of Paper Industries are being “affected very, very severely” by the cost increases.
He told BBC Radio 4’s Today programme: “They’re seeing their costs go up through the roof.
“It’s damaging their profitability and in some cases it’s causing them to manage their production rates so as not to expose themselves to the very, very highest costs.”
He said unlike for household energy there is no cap on business energy costs. He urged a “temporary winter cost containment measure to try and put a lid on those costs so that these very, very important industries for British society are going to be able to continue to operate”.
The Confederation of Paper Industries said the UK was facing a worse situation than the EU.
They pointed out that energy makes up 14% of their businesses bills, whereas in Germany and France it's less than 5%.
The UK is also the world's largest importer of paper meaning local businesses cannot just raise prices as they would be priced out of the market.
Toilet paper ran out across the UK's supermarket in 2020 after people flocked to shops to stock up at the start of the pandemic – leading to many others unable to buy any.
Laura Cohen, chief executive of the British Ceramic Confederation, told the BBC that energy prices are affecting the viability of firms.
She said their members are likely to stop production if the prices rise more and pointed out brick kilns need to operate at over 1,000C.
Rising energy costs are also expected to hit everyday Britons, with analysts predicting bills could rise by 30% next year.
Research agency Cornwall Insight has predicted further volatile gas prices and the potential collapse of even more suppliers could push the energy price cap to about £1,660 in the summer.
The forecast is approximately 30% higher than the record £1,277 price cap set for winter 2021-22, which commenced at the start of October.
Energy regulator Ofgem reviews the price cap every six months, and changes it based on the cost suppliers pay for their energy, cost of policies and operating costs, among other things.