Food and Drink Federation hails inflation fall, yet concerns remain over sector investment
LEEDS, UK - 5 SEPTEMBER 2015. Thorntons Chocolate Shop. People walking past and into the Thorntons Chocolate shop on a busy shopping day in Leeds.
The UK’s Food and Drink Federation has welcomed the latest UK inflation figures that have continued to reduced in the first quarter of 2024, though expressed an urgent need for greater government support for the sector, reports Neill Barston.
According to the latest official figures, general inflation rates dropped from over 4% in January, dropping to 3.4% in February, which is considered the lowest in two and a half years – but this is still stubbornly over the target rate of 2%.
Significantly, the Food and Drink sector, and confectionery and snacks in particular, have experienced turbulent conditions within retail markets in recent times, with consumers faced with paying 50% more with seasonal Christmas shopping. The rate of inflation experienced for the food and drink sector as a whole still remains above headline figures, standing at 5% for February.
As previously reported by Confectionery Production, last year, consumers were faced with significant price hikes, which contributed notably to an ongoing cost of living crisis for many across the region.
Concerns have also been expressed by market analysts that this trend will also continue into Easter, amid a major sustained spike in cocoa prices, which have doubled within the past year, along with other key ingredient hikes for sugar, which has negatively impacted the market.
Karen Betts, CEO, The Food and Drink Federation, offered a cautious welcome to inflation reduction, though she stressed that measures such as ‘not for EU’ being brought in by the government, were not assisting investment in the British sector.
She said: “It’s good to see food and drink inflation continue to fall, to 5.0 per cent in February from 7.0 per cent in January. This reflects prices stabilising across food and drink supply chains, including energy, alongside manufacturers’ continued and sustained efforts to keep prices down for shoppers.
“Food and drink price inflation should continue to ease in the coming weeks. But some underlying factors are acting against this, from rising labour costs to erratic weather patterns, like this winter’s heavy rainfall across the UK which is impacting agricultural crop yields.
“Investment in our industry is also worryingly low if the UK is to be confident in its food security. And the government is making UK food and drink less attractive to invest in with its insistence on UK-wide ‘not for EU’ labelling. This is an expensive and unnecessary policy that will particularly hit small businesses and exports, and we’re urging the government to reconsider. There are good, digital alternatives if the government wants to monitor food movements in the UK, which in time could also be adapted to ease checks with the EU.”