UK consumers to face higher food prices as government regulations on junk food come into force

UK – The Food and Drink Federation (FDF) has warned that consumers will inevitably face higher food and drink prices if manufacturers are forced to absorb the cost of proposed Government policies during the next few years. 

In the report, entitled ‘Eating into household budgets: the Government’s recipe for food price inflation’, the FDF estimates that proposed government policies around public health and sustainability will cost the national industry at least £8 billion (US$9.3 billion).   

The association notes that if these were passed on directly to consumers, it would increase the price of food and drink shopping per household by more than £160 per year.

What’s more, it suggests poorer socio-economic households would see their shopping bills increase by 11%, the same proportion of their entire food shop which is currently spent on fresh vegetables. 

Advocacy group Sustain has branded the FDF’s new report a “recipe for inaction” adding that the ongoing climate and health crises as requiring more immediate action. 

“What this report fails to consider is that any cost to food industry profits are hugely outweighed by existing and future health and environmental costs that have to be picked up by taxpayers and affect the quality of people’s lives,” responds Ben Reynolds, deputy CEO of Sustain. 

“This report is a recipe for inaction, to justify slow or no progress among the laggards in the food industry while discouraging those businesses who are leading the way.” 

In a rejoinder, FDF Chief Executive Ian Wright acknowledged the need to address the pressing concerns around sustainability and obesity adding that its members are doing so on “an epic scale through active commitments to net zero and reformulation.” 

Wright however opined that the suggestion that the UK should introduce further food taxes at this time is madness given the tough times that the people have had to endure during the pandemic. 

The FDF also argues that in the long-term any additional costs will likely increase indebtedness, reduce competitiveness and see investment decline, particularly at a time when businesses are seeking to recover from a difficult period of economic uncertainty. 
  
Instead of piling extra costs on the food and drink sector, FDF urged the UK government to incentivize the sector to prevent food prices from rising and ultimately affecting the country’s poorest households.  

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“The UK enjoys a fantastic range of food and drink at a range of price-points. Our industry has done an incredible job of keeping that cost low for the last three decades,” Ian Wright added. 

“But that period is now at an end. Double digit percentage increases in food expenditure for the poorest households are highly likely in the coming years unless the Government pauses to the consider the consequences of its plans.” 

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