UK’s Food and Drink Federation welcomes inflation drop, yet pricing and sector investment challenges remain
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The UK’s Food and Drink Federation has welcomed a continued fall in inflation within the sector falling to 1.5%, though the organisation noted continued challenges from key retail categories including powdered cocoa and chocolate (18% and 13% respectively) within the past year, reports Neill Barston.
Notably, as Confectionery Production has reported, consumers have been hit especially hard during the past two years, with research from Which observing that some seasonal items including Christmas and Easter lines seeing major price rises of over 20%, in the wake of high pressure on cocoa and sugar markets.
Moreover, while inflation may continue to fall, as many industry observers have stated, this has yet to filter down into prices for major or independent retailers, who have had to pass at least some of the additional costs from higher ingredients, energy and manufacturing costs on to consumers.
Despite the fall in overall food and non-alcoholic drink inflation, there is a mixed picture for individual categories. 18 out of the 49 categories reported by the Office for the National Statistics (ONS) were in deflationary territory in June, while inflation was below 5.0% for 20 categories.
Karen Betts, CEO, The Food and Drink Federation, welcomed news of the inflation drop, but highlighted the fact that investment within the wider food and drink sector continued to lag, as companies have in many instances been unable to enact expansion plans amid challenging economic conditions.
She said: “We’re pleased to see food and drink price inflation continuing to fall. This is key to easing the cost-of-living crisis for households across the country and crucial for business recovery.
“Stabilising input costs will help to restore business confidence and stimulate the critical investment we need to see in food and drink, the largest manufacturing industry in the UK. Our industry is at the heart of the everyday economy and the prosperity of our communities, and central to job opportunities and skills development. Investment is key to safeguarding food security and the resilience of our food and drink sector.
“Investment in food and drink manufacturing fell between 2019 and 2023 by 30%. Our priority is to work in partnership with the new government to address this, and to ensure that the right incentives are in place, alongside regulation that enables business growth and fosters productivity and innovation.”
