Focus on private equity risks food security, warns 2 Sisters founder

The founder of one of the UK’s largest employers has accused the government of ignoring family businesses and putting the security of the UK food chain at risk.

Ranjit Singh Boparan, 59, the founder and owner of 2 Sisters Food Group, has claimed that family businesses have been “forgotten” by the government in favour of private equity and financial services.

“To get the UK economy going you’ve got to use family businesses as the backbone of it, not the BlackRocks or the Vanguards,” he told The Times.

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In a rare interview, Boparan said that overseas investment giants “will come in, they will take and they will go. They have no allegiance to the country.”

The entrepreneur, who left school at 16 and worked as a butcher before founding his business with a small bank loan, employs 25,000 people in the UK across 2 Sisters and the family’s restaurant chains and other businesses.

“They are not listening … I wish the government would listen a bit more,” said Boparan, who claimed his office had recently sought a meeting with Sir Keir Starmer or Rachel Reeves but had been rebuffed.

Boparan also revealed that he plans to invest £1.75 billion in robotics, AI and new farms and factories to improve sustainability and welfare, but he warned that domestic investors risked being driven overseas. He argued that proposed changes to inheritance tax and in particular restrictions on business property relief on agricultural assets, were “horrific” for family businesses and a threat to food security as businesses think twice about investing.

“If you look at what the government has done, they are driving businesses abroad,” he said. “We have money to invest and we are investing in the UK, but when someone comes to me and says I want to build a factory in Poland, it’s hard not to think it would actually be more favourable. You start thinking differently, when really there’s so much more to do in the UK.”

“Food security is the biggest issue this country is going to face if the government does not wake up,” he added.

Boparan said he hoped that the chancellor would be more sympathetic to businesses in her second budget, due to be announced in November, but added that he “would not hold my breath”.

He also called for a level playing field between family businesses and the private equity industry, which benefits from the favourable tax treatment of performance fees, known as carried interest. “If I was private equity I could save taxes or pay no taxes,” he claimed.

2 Sisters supplies poultry and makes chilled ready meals, biscuits and cakes for the likes of Aldi, Asda, Co-op, KFC, Lidl, Marks & Spencer, Morrison’s, Sainsbury’s, Tesco and Waitrose. The group’s turnover topped £3 billion last year as operating profit rose to £101.3 million.

Boporan’s comments echo those of Stuart Machin, chief executive of Marks & Spencer, who called on the Labour government last week to “think again on inheritance tax and introduce a new target to increase the proportion of food eaten in Britain that is produced here”.

Both Machin and Boparan also warned that despite the government’s efforts to speed up planning permissions, they were still difficult to secure. Boparan was particularly frustrated that attempts to expand chicken farms to improve welfare were being frustrated by planning objections.

Charlie Bigham, the founder of the eponymous meals business, recently told The Times that family businesses are underappreciated in the UK and that inheritance tax changes were “catastrophic” for such companies, which employ more than 15 million people in the UK.

Charlie Bigham

TIMES PHOTOGRAPHER RICHARD POHLE

Family Business UK, an industry group, has warned that the inheritance tax proposals “have had a chilling effect on millions of private and family businesses across the country forcing investment and employment plans to be shelved”.

It recently warned that more tax increases in the budget would “sap the confidence of private and family firms” and could lead to a “longer period of anaemic growth and fewer jobs being created.”

A spokesman for the Treasury said: “Domestic and international business together contribute to the growth, jobs and prosperity of the UK. That is why we have capped corporation tax at 25 per cent, the lowest in the G7, secured major trade deals with the US, EU and India, and seen interest rates cut five times since the election to help businesses across Britain.”