Food and drink inflation rise predicted in 2014

David Read, chief executive of Prestige Purchasing, a food supply chain consultancy to the foodservice sector, was speaking after the publication of Prestige Purchasing’s annual Food and Drink Inflation report last month.

It predicted that inflation for the food and drink sector in 2014 could reach between 2% and 6%, but said it was likely to settle at around 3.8%.

‘Almost certain’​

Read said it was almost certain food and drink price inflation would rise above 2013 levels next year. He noted that inflation up to October last year hit 4.2% and in October 2011 4.7%. However, he pointed out that in October 2012, food inflation was lower, at 3.3%.

Read said the dip in 2012 was most likely due to negative gross domestic product growth in the fourth quarter of 2011 and first quarter of 2012 and linked this to talks of a double dip recession.

£19.6bn​

The report also said inflation would add a “whopping”​ £19.6bn to the UK's annual grocery bill by 2018, which is nearly 20% more than current spend. It said, broken down by family, it would cost each UK household an extra £850 annually.

UK food prices have already risen dramatically since 2007, rising by more than 30% and almost double the EU average, Read added.

He said price inflation will be influenced by climate change, water scarcity, global population growth and production costs and commodity markets in 2014.