Will your AF Service Charges be under review?

AF CEO David Horton-Fawkes explains what steps AF Group will be taking on Service Charges.

Several Members have asked if we will be reviewing Service Charge levels in response the level of input inflation.  I am sure you will appreciate that simply because inflation has increased by a given percentage, that doesn’t mean that the buying group’s income increases by the same percentage.  A small adjustment to service charge in a high volume category like fuel will have a huge impact on the overall service charge take across the group, whereas a large reduction in a smaller input category will have little impact.  

But the simple answer is yes, of course we will review service charge levels because it makes no sense for the buying group to benefit at the expense of the Members. We have already adjusted service charges for fuel and electricity, and we agreed at the AGM to review the service charge for fertilizer when the accounts have been audited.  But we cannot flex rates constantly throughout the year in categories where there are multiple product options and price points. 

However, where the Group accrues profit over and above what we need to run the business, this has traditionally been rebated to the Members at the end of the financial year and because we are a not-for-profit, mutual Society, this is not a matter of choice but an obligation.

So, fuel and electricity will continue to be adjusted throughout the year.  Fertiliser for last year (ending 31/1) is being reviewed now.  All other categories would normally be reviewed with the Auditors at the end the year but if there is a glaring case for an adjustment before then, we will consider it. 

I am acutely aware of the financial challenges facing our Members now and the potential for these challenges to get much worse next year as the full impact of war and sanctions drives up prices and disrupts supply chains.  But everyone at AF is committed to using our strong relationships with suppliers to secure continued supply of products and mitigate the impact of inflation, wherever we can.  There is no higher priority in the business.

David Horton-Fawkes

Chief Executive Officer