The Food and Drink Federation (FDF) has warned that consumers will face higher food and drink prices if manufacturers are forced to ‘absorb the cost’ of proposed government policies during the next few years.
In the report, ‘Eating into household budgets: the government’s recipe for food price inflation’, the FDF has estimated that if the cost of forthcoming government policies were passed on directly to consumers, it would increase the price of food and drink shopping per household by more than £160 per year.
It also suggests that poorer socio-economic households would see their shopping bills increase by 11%.
The FDF further explains that according to ONS estimates, a household of one adult and one child in the poorest 10% by income spends £45 per week on food and drink, meaning the government’s proposals could lead to an increase in food and drink spending of nearly 7%.
The FDF is calling on the government to reconsider its policies, which include the reforming of Extended Producer responsibility for the disposal of post-consumer goods (£1.7bn), a Deposit Return Scheme on food and drink packaging (£850m), and the introduction of promotional restrictions on HFSS foods (£833m).
The cost to the food and drink industry of proposed UK government policies around public health and sustainability is at least £8 billion, according to the FDF. This is before factoring in the suggested taxes on salt and sugar as outlined in Henry Dimbleby’s recent National Food Strategy report.
Ian Wright CBE, Chief Executive, Food and Drink Federation, said: “Food and drink manufacturers are close to breaking point. Through the last 16 months our workers have made truly heroic efforts to keep the country fed. Yet now they face a combination of challenges which threaten to deliver food price inflation to already hard-pressed households.
“We absolutely accept the need to address the pressing concerns around sustainability and obesity. Our members are doing so on an epic scale through active commitments to net zero and reformulation. The government needs to understand the costs of the changes it is demanding and the impact it would have on the cost of household food and drink shopping.” Wright added: “The suggestion that we should introduce further food taxes at this time is madness. It is an insult to the hardworking families of this country to be told what to do by those who can’t begin to imagine how tough the last year has been.”