Industry warns that food price increases are only the beginning of what is to come

An industry group warned that "relentless" price increases may not reach their peak until next year.

Industry warns that food price increases are only the beginning of what is to come

An industry group warned that "relentless" price increases may not reach their peak until next year.

According to the Food and Drink Federation representing UK food and beverage makers, it takes between 7-12 months for production costs to reach retail shelves.

Russia's invasion in Ukraine has increased manufacturing costs, such as for energy and fertilizer.

Karen Betts, the boss of the federation, said that prices will "absolutely get worse" before they improve.

According to the Office for National Statistics, food and drink inflation increased to 8.7% in May.

Ms Betts stated that she believes the peak could be in next year, and that prices could rise to 10%.

Other groups such as the Institute of Grocery Distribution which analyzes major grocers predict that prices will rise up to 15% as staples like bread, milk, cheese, and fruit become more expensive.

In May, the UK's overall inflation rate reached its highest point in 40 years, as fuel, food, and energy costs continued to rise.

According to a BBC survey, people who are struggling due to rising living costs are cutting back on food and even skipping meals.

Ms Betts stated that the cost of food and drink manufacturing had already risen during the pandemic because of labour shortages and supply - but that the Ukraine war has made the situation worse.

She said that manufacturers are saying that all their input costs are increasing at the moment. This includes everything from raw materials to energy and labour, and that they don't see a way to stop it.

Russia and Ukraine are both major suppliers of fertilizer. However, Ukraine, also known as the "breadbasket" of Europe, produces substantial amounts of wheat, sunflower oil, and corn.

However, the conflict is causing disruption in the supply of these goods and driving up the prices on international markets.

The sanctions against Russia, a major oil-and-gas producer, have pushed up global energy prices further, affecting both businesses and consumers.

Ms Betts stated that there is a "usually a seven to 12 month time lag between the prices food manufacturers pay and when those price increases are felt on shelves."

She stated that if it costs more to grow sunflowers or wheat for sunflower oil, then price increases will take 12 months and possibly longer to reach food prices in the UK.

Inflation in the UK was 9.1% in May, and the Bank of England expects it to rise to 11% by year's end.

One of the most concerning concerns is the possibility that household energy bills will rise even more in October when Ofgem, the energy regulator, is expected to raise the price cap for electricity and gas.

Therese Coffey, work and pensions secretary, told BBC's Sunday Morning program: "The government understands that this is a difficult time for people.

"The rise in inflation that has led to an increase in bills is largely due to after-shocks caused by Covid. So the global supply chains are not flowing but it is certain that the decision to confront Putin and his invasion Ukraine will have consequences, especially on energy costs."

She highlighted the government's comprehensive package of measures to assist households with energy costs. This included a PS400 discount for fuel bills for all homes.

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