FDF welcomes drop in sector inflation, yet cocoa prices remain notably high
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The UK’s Food and Drink Federation has welcomed figures revealing an easing of inflation within the sector, down to 8%, last month, from near-record highs experience last year, which impacted significantly on the cost of living crisis for consumers, writes Neill Barston.
Karen Betts, the organisation’s CEO believed the latest set of fiscal results were encouraging for many segments, reducing from particularly high levels in 2023, with inflation hitting the confectionery sector by up to 20% for some product ranges within the category.
Indeed, the FDF leader noted that the cocoa sector remains particularly challenged, with prices rising to 45 year highs, due to a cocktail of testing conditions including poor harvests, adverse supply chain issues, and inflation majorly affecting agricultural inputs such as fertilisers, which have risen dramatically in cost.
Speaking on the overall sector’s performance in the UK, Karen Betts said: “It’s good to see food and drink inflation fall to 8.0 per cent in December. This reflects continued falls to input costs alongside manufacturers’ ongoing efforts to cut production costs to keep prices as low as possible for shoppers.
“As we’ve seen previously, prices rise and fall unevenly – so prices have fallen on some products, like whole milk and butter which saw declines of 11.0 and 8.4 per cent respectively, while on others they continue to rise, like olive oil which is up 45.8 per cent on the year. Unpredictable weather patterns continue to impact agricultural harvests – for instance, the global price of cocoa has reached a 45 year high because of a poor harvest in Cote d’Ivoire, the world’s leading producer. Sugar prices, which have risen steeply over the past nine months, have finally started to fall. It remains to be seen what the impact of recent flooding will have on UK crop availability and prices, and whether the rising price of shipping will impact food and drink prices.
“It’s critical as our sector emerges from this inflationary period that businesses attract investment. We need this to ensure our sector’s resilience and growth, and to continue to take the action necessary to play our part in transforming the food system onto a more environmentally sustainable footing.”
