Food price inflation could hit 10% this year, industry body warns

The Food and Drink Federation (FDF) has warned that food price inflation will surge to 10% by the end of 2026 as conflict in the Middle East continues to push up energy and supply chain costs.

The trade body, which represents 12,000 food manufacturers, had previously predicted that food price inflation would decline to 3% by the end of this year.

The FDF warned that the ongoing surge in oil and gas prices would have a significant knock-on effect on food production and transportation costs and that the production of other commodities essential for growing food, such as fertiliser and greenhouses, would also be hit.  

FDF’s chief economist Liliana Danila said cost pressures “are hitting simultaneously, and are a significant challenge for businesses to absorb”.

“The current situation is unprecedented and hard to predict, however, given the scale and speed of these cost increases and despite companies’ best efforts not to pass price increases on, it’s clear that food inflation is going to rise in the months ahead,” she added.

This forecast comes amid a slew of surging operational costs for hospitality as firms face energy contract renewals and rising business rates contributions, which UKHospitality chief executive Allen Simpson described as “a complete contradiction to its stated goals of growing the economy and getting more people back into work”.

• Read The Caterer’s analysis on the impact of the war in Iran on hospitality.

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