Delamore managing director Wayne Eady said: "The changes have changed the way in which we and any other agricultural or horticultural business can possibly operate effectively in the future. The recent increases are only a small part of what is planned over the next four years, changes which represent roughly a seven per cent increase in wages per year. This at a time when inflation is at very low levels and consumers want to pay less."
The British Retail Consortium has found that deflation in the DIY, gardening and hardware category remained above two per cent on last year and -0.3 per cent on last month.
Johnsons of Whixley director Andrew Richardson said: "The big problem is we can't get prices up at all and we haven't been able to for years. We are all working smarter. Some employers are taking away benefits. Profits are coming back a little bit now after the recession. We're looking to maximise use of staff and ultimately at mechanisation."
To maintain profits all businesses will either need to become much more efficient or will "see significantly reduced profits if they are lucky enough to have some", added Eady. "The trade-offs proposed in NICS reductions and corporation tax benefits barely scratch the surface of the impact that will be felt by everyone utilising employees at close to the NLW."
After discussions with the NFU and British Protected Ornamentals Association, Eady has advocated that growers write to their MPs to discuss NLW concerns. The NFU commissioned Andersons Midlands to examine the NLW's impact. It found profits in the horticultural sector have declined to a range typically equivalent to two-to-eight per cent of turnover - not enough to invest in mechanisation - and mitigation in the form of reduced corporation tax is not applicable to a proportion of horticultural businesses.
Anderson summarised that the introduction of the NLW will increase the cost of seasonal wages for the growers of horticultural crops in the UK by 35 per cent over the period 2016-21, or seven per cent per year, above the 2.47 per cent annual rate of wage inflation under the minimum wage for the preceding five years.
It found: "Any measures that increase the rate of inflation of growers' main cost of production - the costs of employment - will put in question the growing of some horticultural crops in the UK. One of the likely results is a reduction in supply. In principle, the main consequences of this reduced supply could include an increase in produce prices, a reduction in consumer demand and an increase in imported produce to replace reduced domestic supply."