Food prices set to rise further in second half of the year
As Prime Minister Theresa May addresses residency rights with the EU, the government is being urged to provide similar clarity on what might be planned to limit inflationary pressures and reassure businesses coping with increasing costs.
Purchasing company Beacon said that it had received an unprecedented number of price rise notifications from suppliers since the start of the year, an increase of 267% on the same period last year.
It believes that these inflationary pressures are threatening the prosperity of the £27b food and drink industry, describing rising prices and the threat of a consumer spending slowdown as areas of concern for independent operators.
Beacon director of purchasing Hans Ziebeck (pictured) said that food prices were likely to climb in the second half of the year - up to 25% in some cases - further threatening the viability of some businesses.
He said: "The benefits of Brexit if you are a small independent British business have been pretty hard to spot in the last 12 months. We are still no closer to understanding how this will play out and as such a damaging whirlpool of worry has formed which is hitting smaller independent businesses the hardest.
"What is really concerning is that there could be worse to come in the second half of the year as transformation companies who import ingredients begin to run out of previously hedged currency and suppliers start renegotiating terms of new cost structures.
"Since the start of the year we have seen an unprecedented number of price rise notifications from our suppliers, a 267% increase on the same period last year. Beacon has managed to mitigate price rises of up to 25% in some cases already, but ultimately the continued upward pressure on pricing is not sustainable and must be absorbed somewhere within the value chain which means the end consumer is going to continue to feel the pinch for the foreseeable future, either at the supermarket or on menu prices."
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