FDF increases call for regulation review after ‘sobering’ inflation figures
FDF continues to call on the government to conduct a robust review of regulation and to act where that's adding to price rises. Image: Shutterstock
Industry and government need to work hand-in-hand to ensure the cost of doing business is kept as low as possible, stated the Food and Drink Federation (FDF) following the release of inflation figures in the UK.
The FDF is maintaining its stance in calling for the government to minimise the costs of existing and new regulation, with a view to responding to shortages in supply in as “agile a way as possible.”
In the FDF’s Food Prices Report published in July 2021, it was predicted that additional costs to industry from UK Government regulation will lead to an annual increase of food and drink shopping per household of £160. That increase will prove even higher at current inflation rates.
Chief executive of the Food and Drink Federation Karen Betts said: “The inflation figures are very sobering, with food and non-alcoholic drinks prices rising by 6.7%, slightly more than food manufacturers’ had feared.
“This is a very worrying time for many households, and food and drink businesses are continuing to do everything they can to contain food-price inflation. However, the pressures on both large and small businesses are immense. Ingredient price rises have been relentless for more than a year now, as a result of pressures in the global supply chain caused by the Covid-19 pandemic.
Betts added that the war in Ukraine, with both Ukraine and Russia important suppliers of commodities like wheat and food oils, as well as energy and fertiliser, has made the situation worse.
“Our sector is, in particular, impacted by the significant rises in energy costs seen this year – with over 60% of food and drink manufacturers reporting energy price rises are impacting their operations. Meanwhile, wages are rising too with labour shortages right across our sector taking hold.”
According to the FDF, the food and non-alcoholic drink price rise of 6.7% is the largest since June 2011. Annual food and non-alcoholic drink inflation accelerated to 6.7% in April from 5.9% in March.
Manufacturers are working hard to avoid passing these increases in costs on to consumers through greater efficiency, forward buying and the use of hedging arrangements to protect against currency shifts.
Karen Betts added: “We continue to call on the government to conduct a robust review of regulation and to act where that’s adding to price rises in shops without a like benefit to shoppers.”