6 Mins
Written by: Matthew McDermott
Head of Food and Drink
Last reviewed: 5 November 2026Scotland’s food and drink industry is one of the country’s economic success stories, contributing billions to the economy and supporting communities across the nation. Yet despite its importance, businesses throughout the sector are facing mounting pressures that threaten future growth, investment and profitability.
From food producers and manufacturers to exporters, restaurants, hotels and hospitality operators, rising costs and increasing regulatory demands continue to place significant strain on businesses already operating on tight margins.
Growing Pressures Across the Industry
According to industry figures, Scotland’s food and drink sector contributes more than £19 billion in economic value and remains a major employer across the country. However, business leaders are increasingly concerned about the cumulative impact of rising employment costs, inflation, energy prices, recruitment challenges and taxation.
Henderson Loggie’s Head of Food & Drink, Matthew McDermott, believes greater support is needed to help businesses continue investing and growing in an increasingly challenging environment.
Many operators are now working with significantly reduced profit margins, limiting their ability to expand, invest in new opportunities or strengthen long-term resilience.
A particular concern remains the tax burden facing hospitality businesses. VAT rates applied to the sector in the UK remain higher than those seen in several European countries, while increasing employment costs continue to add pressure for employers across the food and drink supply chain.
Supporting a Sector That Drives Economic Growth
Despite these challenges, Scotland’s food and drink and hospitality industries continue to demonstrate remarkable resilience.
Businesses across the sector have adapted to shifting consumer trends, embraced innovation and continued to create jobs while navigating a difficult operating environment. Their contribution extends far beyond individual businesses, supporting local economies, supply chains, high streets and communities throughout Scotland.
As policymakers consider future economic priorities, ensuring the sector can continue to thrive will be critical to Scotland’s long-term growth and prosperity.
Industry Challenges Discussed at Business of Hospitality Event
Many of these issues were explored at our recent Business of Hospitality event, hosted in partnership with Barclays at their Glasgow Campus.
The event brought together hospitality leaders, business owners and industry professionals from across Scotland for an engaging discussion on the opportunities and challenges shaping the sector.
The afternoon featured a keynote address from Graeme Cheevers, Michelin starred chef and owner of restaurant, Unalome, who shared his personal journey and insights on the current economic landscape and the outlook for businesses across the hospitality sector.
The panel discussion was hosted by Sarah Heaney, Glasgow Chamber of Commerce and featured:
- Graeme Cheevers, Owner of Unalome
- Stephen Montgomery, Director of the Scottish Hospitality Group
- Matt McDermott, Head of Food & Drink at Henderson Loggie
- Darren Kippen, Relationship Development Director at Barclays
- Kelly-Anne Mazengera Fairweather, The Selkie Group
Together, the panel explored a range of topics affecting hospitality businesses today, including rising operating costs, workforce challenges, taxation, economic uncertainty, changing customer behaviours and the opportunities that remain for growth and innovation.
One of the strongest messages to emerge from the discussion was the resilience of the sector. While businesses continue to navigate significant challenges, there was a shared sense of optimism, collaboration and determination to drive the industry forward.
The event highlighted the value of bringing together industry leaders to share experiences, exchange ideas and discuss practical ways to support the future success of Scotland’s hospitality sector. It also reinforced the importance of ensuring the industry’s voice continues to be heard as businesses adapt to an evolving economic landscape.
Looking Ahead
Scotland’s food and drink and hospitality sectors have long been at the heart of the nation’s economy. However, maintaining that success will require an environment that encourages investment, supports growth and recognises the challenges businesses are currently facing.
At Henderson Loggie, we remain committed to supporting businesses across the sector through specialist advice, industry insights and opportunities to connect with peers and experts.
Our recent Business of Hospitality event demonstrated the appetite for these conversations, and we look forward to hosting more events in the future.
To stay up to date with upcoming events, sector insights and expert commentary, keep an eye on our website and follow us on social media.
