2 Sisters boss says Budget will deliver ‘fatal blow’ to UK farmers

Ranjit Singh Boparan, whose £5bn empire expands across a range of companies such as 2 Sisters, Bernard Matthews, Holland Pies and Carluccio’s, is among the latest food sector kingpins to criticise the Autumn Budget’s impact on the food sector.

Last week, Sainsbury’s boss Simon Roberts said he was standing behind farmers as the many within the sector responded with outrage over the changes to the Agricultural Property Relief (APR) announced in the Autumn Budget.

The APR is a type of inheritance tax relief which reduces the amount of tax that farmers and landowners must pay when farmland is passed down.

The changes announced by Chancellor Rachel Reeves on 30 October 2024 mean that Inheritance Tax will now be charged at 20% on farms worth more than £1m.

Boparan, whose businesses rely on a network on independent, family-owned farms and who employs more than 23,000 people in the UK and Europe, explained that this move will likely see food supplies ‘severely compromised’.

“This Budget was a disaster for business and will deliver a final fatal blow to the thousands of small family-owned farms we in the food manufacturing sector rely upon day in, day out. They provide security of supply. This move will create food inflation and food insecurity. It will mean less people investing in food production in the UK,” ​he contended.

While the UK Government claims that the new £1m threshold means three-quarters of farms will not be impacted by the change, the National Farmers Union (NFU) believes this to be an underestimate.

The Union said that the ‘shock and anger among its members has been acute’, with its president Tom Bradshaw warning that around 75% of the total farmed area are likely to be affected by the extended ‘death tax’.

“This Budget not only threatens family farms but will also make producing food more expensive,”​ Bradshaw said following the Chancellor’s announcement.

Findings from the Country Land and Business Association (CLA) published today (12 November 2024) have underscored these fears.

According to its analysis of model arable farms, a typical 200-acre farm owned by an individual with an expected annual profit of £27,300 would face an Inheritance Tax bill of £435,000.

According to CLA, even if the farm spread this over a period of 10 years, it would require them to allocate 159% of its profit annually to cover the costs. Then, to pay that bill, successors would be forced to sell 20% of their land.

“Either the government isn’t being honest with the public about the true impact of these reforms, or they don’t understand the nature of rural businesses. I'd like to believe it is the latter and that they are prepared to listen to our input rather than continually trying to dismiss it,”​ Gavin Lane, deputy president of the CLA, argued.

These comments come as confidence in the UK poultry’s sector’s farming base remains worryingly low, with NFU data revealing 15% of chicken producers are either unlikely or unsure if they’ll still be producing poultry beyond November 2025.

2 Sister’s Boparan said that inflationary rises, higher levels of Avian flu and geopolitical conflict have left farmers particularly vulnerable.

“All this has pushed British poultry to breaking point, and I see this latest inheritance tax rise as the issue that will push thousands of farms over the edge, it really is quite unbelievable given what they’ve had to endure,” ​he added.

“This makes a mockery of the government claiming to want a self-sustaining farming sector that champions British-made food. This tax rise does the exact opposite of that – it kills the sector, stifles supply and ultimately prices will rise.”​

While some will likely appreciate the various arms of the industry rallying together, not everyone is impressed.

Stuart Roberts, a cereal, beef and sheep farmer based in Hertfordshire, questioned whether there were double standards at play.  

“Anyone else find it slightly galling seeing Supermarkets in the media being the biggest critics of the APR / Budget problems for farmers when a fundamental problem is decades of a lack of profitability in farming caused by a complete imbalance & unfairness in food supply chains,” ​Roberts posted on X.

Anyone else find it slightly galling seeing Supermarkets in the media being the biggest critics of the APR / Budget problems for farmers when a fundamental problem is decades of a lack of profitability in farming caused by a complete imbalance & unfairness in food supply chains

— Stuart Roberts (@HertsFarmer) November 9, 2024

It’s not just the farming community that is likely to be rattled by these changes. Boparan estimates the tax raid will cost his own portfolio of businesses “many tens of millions”​ which will be passed onto the consumer.

“The retail sector has already quoted it will cost £1bn and in truth our sector won't be much behind that. £2bn on-cost is going to cause food inflation, all the while we've been spending all our time trying to bring inflation down,”​ he added.

“This Budget has done very little to encourage business owners to invest and build. Some businesses will find these changes a burden and it makes it more difficult to keep running smoothly and maintain value. Privately-owned businesses are the backbone of the UK economy and take a different view on long-term investment. All this budget package does is reduce confidence and increases the chances of closures or selling to Private Equity for example, which invariably generates less tax.”​

Further tax fears have also been flagged by other industry representatives, including increases to Capital Gains Tax – essentially a tax you pay on any profit made when you sell or gift an asset – and changes made to National Insurance contributions. Read our initial industry Budget reaction article here.​​