September 06 2021

Why are we seeing food price rises in the UK?

Photo by Call Me Fred on Unsplash

Anxieties surrounding the import, supply, access and prices of food in the UK have heightened over the last 18 months.
The implications of COVID restrictions brought about rapid panic regarding the availability of food and drink on our shelves, and in recent months, this has paired with the implications of Brexit and trade agreements, on top of the quickly rising issue of worker shortages in the Industry.
COVID-19 restrictions to work, trade and travel caused a variety of disruptors for the sector; customer closures for distributors and an ability to meet demand stirred nation-wide anxieties, responsible for the panic-buying and stock shortages for retailers at the very beginning of the pandemic.
Now, the UK’s exit from the EU has concerned experts, who warn of likely food price rises over the coming months.

food price rises UK

BRC chief executive Helen Dickinson stated that “there are some modest indications that rising costs are starting to filter through into product prices”, as “a shortage of lorry drivers and a global lack of microchips had combined to create conditions for future inflation.” (1)
Brexit’s tightening of immigration policies, coupled with the emmigration of UK workers over the past 18 months has contributed to 16% vacancies for the Industry, and so Industry leaders have urged the UK’s Government to incentivise both UK and non UK residents to look for work in the food and drink network.
To give a better understanding of the implications of the Brexit trade agreement, below is a breakdown of where our food comes from:

Where does the UK get its food from? - sourced from Bloomberg.com / Defra Data 2019

(https://www.bloomberg.com/news/articles/2020-10-25/brexit-covid-and-climate-colluding-to-raise-u-k-food-prices)

“The leading foreign supplier of food consumed in the UK were countries from the EU (26%). Africa, Asia, North and South America each provided a 4% share of the food consumed in the UK.” (4)

So how will these rising prices directly affect the consumer?

Heightening costs for imported ingredients, products, commodities alongside changing import charges & tariffs, once sustained for long enough, will inevitably trickle down to the consumer, experts have warned.
Difficulty and disruptors in the supply chain are not exclusively blamed on Brexit, with COVID’s restrictions also playing a key role. Despite this, it has been warned that without intervention from the Government, the consumer will have to take on some of these rising costs and we will see this reflected directly onto our supermarket shelves. (1)
To give an idea of the extent to which prices will rise, the Food & Drink Federation has predicted that the “price of food and drink shopping per household will rise by more than £160 per year.” (3)
The FDF shed some light on policies that are contributing to these rises and the inevitability of trickling down costs to the end consumer; “Extended Producer responsibility for the disposal of post-consumer goods (£1.7bn), a Deposit Return Scheme on food and drink packaging (£850m) and the introduction of promotional restrictions in foods that are high in fat (£833m), sugar or salt, are estimated to cost the industry at least £8bn”.
With supply chain operators having to incorporate these policies and financial changes into their business models and their own profits and growth, it is likely that smaller producers will be the most vulnerable.
For more information, you can take a look at some of the additional reading and references used in this article below.
References
  1. https://www.independent.co.uk/news/business/news/brexit-shop-prices-driver-shortage-b1912246.html#r3z-addoor
  2. https://www.consultancy.uk/news/26790/brexit-expected-to-lead-to-higher-food-prices-for-consumers
  3. https://www.specialityfoodmagazine.com/news/food-price-rise-warnings-brexit-regulations
  4. https://www.gov.uk/government/statistics/food-statistics-pocketbook/food-statistics-in-your-pocket-global-and-uk-supply
  5. https://www.bloomberg.com/news/articles/2020-10-25/brexit-covid-and-climate-colluding-to-raise-u-k-food-prices
Image Sources
  1. Photo by Anne Preble on Unsplash
  2. Photo by Call Me Fred on Unsplash

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