{"id":579011,"date":"2026-04-01T17:53:19","date_gmt":"2026-04-01T17:53:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/579011\/"},"modified":"2026-04-01T17:53:19","modified_gmt":"2026-04-01T17:53:19","slug":"uk-food-inflation-could-hit-9-trade-body-warns-as-reeves-meets-retail-chiefs-food-drink-industry","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/579011\/","title":{"rendered":"UK food inflation \u2018could hit 9%\u2019, trade body warns as Reeves meets retail chiefs | Food & drink industry"},"content":{"rendered":"

Food inflation could hit 9% in the UK this year even if the strait of Hormuz<\/a> opens within the next few weeks, figures suggest, as the Iran war pushes up energy prices.<\/p>\n

The Food and Drink Federation (FDF), which represents 12,000 food and drink manufacturers, has predicted prices will rise by \u201cat least\u201d 9% by the end of 2026, almost tripling a forecast of 3.2% that was made before the Middle East conflict.<\/p>\n

The chancellor, Rachel Reeves, met supermarket bosses<\/a> on Wednesday to discuss how to ease any impact of cost inflation on prices at the till, while global markets rallied<\/a> on remarks from Donald Trump suggesting the war could end in \u201ctwo to three weeks\u201d.<\/p>\n

The FTSE 100 shut 1.8% higher on Wednesday, its biggest one-day gain in almost a year. Oil fell as low as $98.35 a barrel at one point, its lowest level in a week, before returning to nearer $102.<\/p>\n

Dr Liliana Danila, the chief economist at the FDF, said the industry was already facing big rises in energy, transport and packaging costs, as well as disruptions across its supply chains.<\/p>\n

\u201cThe current situation is unprecedented and hard to predict,\u201d she said. \u201cGiven the scale and speed of these cost increases, and despite companies\u2019 best efforts not to pass price increases on, it\u2019s clear that food inflation is going to rise in the months ahead.\u201d<\/p>\n

The 9% forecast assumes that the strait of Hormuz, a key shipping channel, will reopen to cargo traffic within the next two to three weeks, and the majority of large energy facilities, such as oil, gas and fertiliser sites, return to normal within a year.<\/p>\n

Retailers including the boss of Tesco, Sainsbury\u2019s, Morrisons, Marks & Spencer, Aldi and Lidl met Reeves and the environment secretary, Emma Reynolds, at No 11 Downing Street on Wednesday.<\/p>\n

They are understood to have asked the chancellor to take action to ease cost pressures, with help on energy bills and a delay on new regulatory fees or adjustments such as on packaging, unhealthy food and employment rights.<\/p>\n

A government spokesperson said it was a \u201cpositive meeting\u201d and businesses and ministers had \u201cagreed to work together to explore what more can be done to ease the cost of living for consumers and strengthen supply chains\u201d.<\/p>\n

One attender said the meeting had been \u201cvery constructive\u201d, saying the government had been particularly willing to try to find ways to help with energy bills as \u201cthis runs through the whole supply chain\u201d.<\/p>\n

UK farmers and producers have said that without government help with surging energy bills there could be shortages of domestic tomatoes, cucumbers, peppers and aubergines.<\/p>\n

Growers\u2019 representatives have said that without support from ministers, or the retailers they supply, fresh produce businesses could go bust later this year as higher costs bite.<\/p>\n

Simon Conway, the chair of the British Tomato Growers\u2019 Association (BGTA), said: \u201cGrowers historically only make money in the last few weeks of the season, as margins are so tiny in this sector. No one can absorb these kind of cost shocks, they have to be worked through with retailers.\u201d<\/p>\n

Many businesses, which typically fix their energy contracts from April<\/a>, will be hit by a sharp rise in costs from Wednesday amid increases in standing charges, the fixed daily cost added to bills for accessing the UK\u2019s gas and electricity network.<\/p>\n

The BTGA and other food producers are campaigning to be classed as \u201cenergy intensive users\u201d by the government, a classification that would help to reduce their bills. If there is no support, \u201cbusinesses will fail\u201d, said Conway.<\/p>\n

Energy bills are just one extra cost facing food producers, along with higher prices for packaging and the fuel needed to transport goods to retailers.<\/p>\n

The effect of a string of cost increases \u201chasn\u2019t hit yet but is coming towards the end of the summer\u201d, said Conway. He added that retailers remembered the gaps on shelves in early 2023<\/a>, when there were fresh produce shortages.<\/p>\n

Meanwhile, household energy bills are due to fall until July, but are then expected to jump<\/a>. The government is coming under increasing pressure to provide support on higher energy bills<\/a>, although so far it has suggested that any help would be targeted for the most vulnerable households.<\/p>\n

In an interview with the BBC, Reeves said the government was looking at ways in which it could support people based on their household income.<\/p>\n

However, she did not commit to cutting fuel duty or VAT on petrol, saying she had to be careful with promises to lower prices too much as it could then push up overall inflation, interest rates and taxes.<\/p>\n","protected":false},"excerpt":{"rendered":"Food inflation could hit 9% in the UK this year even if the strait of Hormuz opens within…\n","protected":false},"author":2,"featured_media":579012,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-579011","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/579011","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=579011"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/579011\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/579012"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=579011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=579011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=579011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}