UK Food Manufacturers Face Prolonged Inflationary Pressures
UK food and drink manufacturers are facing a prolonged period of inflationary pressure, according to a warning from the Food and Drink Federation (FDF). The organization's latest forecast predicts that food and non-alcoholic drink inflation will reach 3.9% by December 2026 before climbing to a peak of 6.4% in July 2027.
The FDF blames energy disruptions from the conflict in Iran, as well as severe climate events such as El Niño and summer droughts across Europe, for the sector's woes. Food manufacturers have taken on the role of shock absorbers, keeping food prices low despite these challenges. However, after six years of continuous disruption, their operational resilience is wearing thin.
The FDF has urged the UK government to take action to support the industry. They recommend targeted energy support for food and drink manufacturers, streamlining packaging reform, and pausing promotional and advertising rules that are adding billions to production costs. By taking these steps, the government can help reduce food inflation and provide relief to hard-pressed consumers.