Britain’s largest poultry processor has handed supermarkets a £70m bill for the Chancellor’s tax-and-wage squeeze, in one of the clearest signals yet that Labour’s labour-cost reforms are working their way through the nation’s grocery aisles.
2Sisters Food Group, the West Bromwich-based business founded by Midlands entrepreneur Ranjit Boparan (pictured), confirmed it has passed on the entire additional cost to Tesco, Sainsbury’s, Marks & Spencer and other major retail customers. The increase, the company said, was the direct consequence of Rachel Reeves’s decision last spring to raise employers’ National Insurance contributions and lift the national minimum wage, measures the British Retail Consortium warned at the time would make price rises “inevitable”.
The disclosure lands in the middle of an increasingly heated debate over the cumulative impact of the Chancellor’s Budget on Britain’s productive economy. For a business that supplies roughly one in every three poultry products sold in the UK, slaughtering and processing 10.4 million birds a week from a network of more than 700 farms, even a marginal tweak to employment costs reverberates a long way down the till receipt.
2Sisters employs 13,500 people, making it one of the most heavily exposed companies in the country to changes in payroll taxation. Mr Boparan, long dubbed the “chicken king” of British food, has built a sprawling operation that touches almost every fridge in the land, and the group’s pricing decisions are watched closely by Whitehall and the Competition and Markets Authority alike.
Concern over the wider chilling effect of the National Insurance increase has spread well beyond the food sector. Malcolm Gomersall, chief executive of Grant Thornton’s UK business, said this week that the rise was “not great for businesses who are looking to grow”. He added: “There is a hidden cost of growth and if I could wave a wand, it would be to try and make it easy to employ more people with less related taxes on the employer. UK growth would be supported by lower national insurance contributions.”
It is not the first time 2Sisters has weighed in on government policy. Richard Pennycook, the seasoned retailer who chairs the group on a non-executive basis, warned last year that the curtailment of agricultural property relief would persuade many family farmers to “give up”. His intervention helped galvanise a rural revolt that ultimately pushed Sir Keir Starmer into diluting the inheritance tax measure earlier this year.
Yet for all the political noise, the underlying business is humming. Accounts for the twelve months to July 2025 show pre-tax profits soaring to £108m, up from £35.5m the previous year, helped by a 9 per cent rise in turnover to £2.38bn. The figures were also flattered by the sale of the group’s European poultry interests to the Boparan family’s private office, a transaction that has simplified the corporate structure and concentrated management attention on the home market.
Feed costs, historically the swing factor in poultry margins, fell by 5 per cent over the period. Mr Boparan’s team said those savings had been handed back to customers, partially offsetting the labour-cost increases pushed through elsewhere.
Looking ahead, the company describes itself as “cautiously optimistic”, but the outlook is far from straightforward. The escalating conflict in the Middle East threatens to send food and energy inflation higher, and the Food and Drink Federation has cautioned that grocery inflation could touch 10 per cent before the year is out. Some suppliers are already understood to be levying so-called “Donald Trump surcharges” on imported produce, reflecting the knock-on effect of the White House’s tariff regime on fertiliser and fuel costs.
Working in the group’s favour is a marked consumer pivot back to traditional animal proteins, accelerated by Robert F Kennedy Jr’s “Make America Healthy Again” agenda across the Atlantic, which has lent fresh momentum to demand for chicken, eggs and unprocessed meats.
“We remain committed to investing in our factories and utilising advanced technologies, helping to grow our core business while supporting our sustainability ambitions,” Mr Boparan said.
For Britain’s SME-rich food supply chain, and for the millions of shoppers who buy 2Sisters’ chicken without ever seeing the brand, the message from West Bromwich is unmistakable. The Treasury may have collected its National Insurance windfall, but the bill has not disappeared. It has simply moved further down the trolley.
