Middle East briefing: Conflict and the food workforce
12 May 2026Middle East instability is raising energy risk for UK food jobs. This briefing maps exposure and why leaders should pledge support to Feeding Britain’s Future 2026.
Why this matters now
Renewed instability in the Middle East is raising the risk of higher and more volatile energy costs, with knock on effects for UK households and industry. Recent analysis from the EY ITEM Club, a group of UK economic forecasters, projects a loss of around 163,000 jobs in 2026 (their central forecast), with relatively weaker regions expected to be hit hardest as concerns about global energy routes and prices intensify. This is likely to impact areas where energy intensive industry is concentrated. As households curb discretionary spending amid a renewed cost of living squeeze, retail and hospitality in Britain’s major cities are set to see the sharpest slowdown.
At the same time, the UK labour market is weakening. Employment is falling, unemployment is rising and vacancies are declining, with forecasts pointing to material job losses across the economy over the coming year. This shift comes as businesses also absorb higher National Living Wage levels and increased National Insurance contributions.
For food and drink businesses, the challenge is acute: margins remain thin, demand growth is weak, and cost pressures are being renewed from multiple directions at once – energy, labour and capital.
Where are food industry jobs most exposed
Higher energy costs do not affect the food system evenly. Based on IGD analysis, the greatest workforce exposure sits in parts of the supply chain where energy and labour costs intersect most sharply:
Food and drink manufacturing
Energy‑intensive activities such as baking, chilled and frozen foods, meat and dairy processing face the most immediate pressure. Higher gas and electricity costs squeeze margins further, increasing the risk of job losses, reduced shifts or delayed recruitment – especially in plants already operating at low utilisation.
Cold storage, warehousing and logistics
Refrigerated warehouses and temperature‑controlled transport are particularly exposed to energy volatility. Any sustained rise in costs is more likely to trigger automation investment, network consolidation or efficiency drives that reduce labour demand in the short term.
Primary processing and fertiliser‑linked supply chains
Higher energy prices feed through into fertiliser and feed costs, worsening cost pressure upstream. While this does not always translate immediately into job losses, it limits investment and hiring capacity across farming and early‑stage processing.
Regions with concentrated food manufacturing
Clusters such as the Humber, South Wales and parts of the Midlands face regional labour risk, where energy costs, industrial concentration and weaker local labour markets interact – particularly if plants scale back output.
A paradoxical labour market: rising unemployment, persistent shortages
Ordinarily, rising unemployment would be expected to ease recruitment pressure. However, IGD’s report Food and drink workforce – a quiet crisis building? shows why this is not happening in food and drink.
Vacancies remain hard to fill in frontline, skilled and unsocial roles despite a growing pool of unemployed people.
Rising labour costs make low‑productivity roles harder to sustain, increasing pressure to do more with fewer people.
Demographic and skills mismatches mean unemployment alone does not solve availability or capability gaps.
The risk is that higher energy costs accelerate cost‑cutting decisions before the workforce problem is resolved – worsening future capacity and resilience.
Automation and AI: coping strategy or false economy?
Energy and labour pressures are reinforcing interest in automation and AI across the food system. In some areas, this can deliver real productivity gains. But in practice:
Automation often raises capital costs and skills requirements, not eliminating workforce risk but reshaping it.
Reduced entry‑level hiring today weakens the future talent pipeline, especially in manufacturing and logistics.
Businesses risk trading short‑term cost relief for longer‑term workforce fragility.
This is why productivity, skills and attraction must move together – not in isolation.
Why Feeding Britain’s Future matters more, not less, in a slowing labour market
In a cooling economy, it may be tempting to pause workforce investment. But a slowing labour market can mask structural fragilities and make it easier to rebuild the pipeline if we act now.
As set out in Food and drink’s talent gap: Act now, a softer jobs market does not fix the underlying barriers that keep food and drink short of people and skills. Feeding Britain’s Future is designed to help businesses take practical, collective action, without asking each organisation to reinvent the wheel.
Rebuild the future talent pipeline by reaching young people earlier, while competition for labour is temporarily less intense.
Strengthen work‑readiness and early‑career confidence through scalable employability support, helping improve retention and reduce repeat recruitment costs.
Shift perceptions of the sector by showing clearer pathways, purpose and progression, so food and drink compete more effectively for the next generation.
For businesses facing energy volatility and margin pressure, this is about protecting future capacity and resilience, not adding avoidable near‑term cost. A weakening labour market is precisely when industry can collaborate to widen the talent pool and improve job readiness at scale.
What food and drink leaders should focus on now
Pledge support to Feeding Britain’s Future 2026. Email feedingbritain'[email protected] by 25 May 2026 to formally join the movement and share your high‑res logo (PNG or JPEG, minimum 200KB, ideally resized to 256×256 pixels).
This secures your Chief Executive and Senior People Leader a place at our launch event on 4 June.
Stress‑test workforce plans against higher energy costs and weaker demand scenarios.
Avoid hollowing out entry‑level hiring in ways that undermine future skills availability.
Use Feeding Britain’s Future to build resilience collectively, rather than relying only on firm‑level fixes.