UK food prices on the horizon, FDF warns

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July 21, 2021 — The Food and Beverage Federation of Britain (FDF) has re-issued stern warnings of escalating food prices if manufacturers are forced to absorb the cost of proposed government health-related policies and sustainability over the next several years.

“This is before taking into account the suggested taxes on salt and sugar,” he warns in his latest report titled Eating into Household Budgets, referring to the recently proposed taxes on sugar and salt in Britain in as part of the UK’s National Food Health Strategy.

While the introduction of food taxes is a point of contention for the FDF, advocacy group Sustain called the association’s new report a “recipe for inaction.” Campaigners point out that the ongoing climate and health crises require more immediate action.

Click to enlargeThe FDF estimates that the cost of future policies passed on to consumers could increase the price of food per household by more than £ 160 (US $ 218) per year.Weigh the costs
The report targets seven government measures that are implemented or introduced by 2024 to tackle industrial levels of plastic waste in the food system, as well as to tackle healthier diets and reduce the marketing of junk food as part of a government strategy against obesity.

“What this report does not take into account is that any cost to the profits of the food industry is largely outweighed by existing and future health and environmental costs which must be borne by taxpayers and affect quality. of people’s lives, ”replies Ben Reynolds, Deputy CEO of Support.

“This report is a recipe for inaction, to justify the slow or lack of progress among the food industry laggards while discouraging leading companies.”

Barbara Crowther, Coordinator of Children’s Food Campaign, working with Sustain, adds: “People are fed up with being constantly bombarded with junk food marketing, and the proposed restrictions on advertising and promotions are extremely popular with the public. .

“We agree that healthy foods should be affordable for low-income people, but it is unhealthy foods and drinks containing sugar, salt and saturated fat that are the targets of government action. The report is a disguised attempt to undermine government regulations and put industry profit margins and shareholder returns ahead of public health and the protection of the planet. “

Upcoming policies
The FDF calculates that the government’s proposed public health and sustainability policies will cost the domestic industry at least £ 8 billion (US $ 9.3 billion).

Looming policies include reform of Extended Producer Responsibility for the disposal of post-consumer goods (£ 1.7bn; US $ 2.3bn), a security deposit system on consumer packaging. ‘food and drink (£ 850 million; US $ 1.2 billion) and the introduction of promotional restrictions on foods high in fat, sugar and salt (£ 833 million; US $ 1.2 billion US dollars).

“In the midst of a climate emergency and health crisis, it is shameful that this report has selected all measures designed to fight obesity and reduce industrial levels of pollution and waste,” notes Crowther.

In the new report, the FDF estimates that if the cost of future government policies were passed directly to consumers, it would increase the price of food and drink purchases per household by more than £ 160 (US $ 218) per year.

Click to enlargeThese additional costs also occur in a context of rising inflationary pressures, underlines the FDF.“We absolutely accept the need to address urgent concerns about sustainability and obesity,” said Ian Wright, CEO of FDF. “Our members are doing it on an epic scale through active commitments to net zero and reformulation.”

“The suggestion that we should introduce new food taxes right now is madness. It is an insult to working families in this country to be told what to do by those who cannot begin to imagine how difficult the past year has been.

“Close to breaking point”
The FDF analysis further suggests that poorer socio-economic households would see their purchase bills increase by 11%, the same proportion of their entire grocery store that is currently spent on fresh vegetables.

According to estimates by the UK Office for National Statistics (ONS), a household of one adult and one child belonging to the bottom 10 percent in terms of income spends £ 45 (US $ 61) per week in food and drink, which means the government’s proposals could lead to an increase in food spending of nearly 7 percent.

These additional costs related to government policies also come at a time of increasing global inflationary pressures, the FDF stresses. With his report, he calls for “fundamental reforms” of the UK’s regulatory architecture, to ensure that future policy is “effective and well targeted”.

“Food and beverage manufacturers are near the breaking point,” says Wright. “Over the past 16 months our workers have made truly heroic efforts to feed the country. Yet they now face a combination of challenges that threaten to push food prices up for already hard-pressed households. “

Long-term impacts of additional costs
The FDF also argues that in the long run, any additional costs are likely to increase leverage, reduce competitiveness and lead to lower investment, especially at a time when companies seek to recover from a difficult period of uncertainty. economic.

The F&B sector is the largest industry in the UK, he points out. “If the government is serious about leveling, it needs to push the industry and not rack up additional costs. Ninety-seven percent of all food and beverage companies are SMEs, and they are the most exposed to these risks. “

“The UK has a fantastic range of food and drink at different prices,” says Wright. “Our industry has done an incredible job of keeping this cost low over the past three decades. “

“But that period is now over. Double-digit percentage increases in food spending for the poorest households are very likely in the years to come, unless the government stops to consider the consequences of its plans.

By Benjamin Ferrer

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