There’s still time to turn the tide on rising food and drink prices
6 June 2025, 08:08
Over many years, Brits have seen the price of their weekly shop rise, and that pressure is not going away.
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Food and non-alcoholic drink inflation reached 3.4% in April 2025 and the Food and Drink Federation’s (FDF) forecast is that it could average at 4.3% across 2025.
Increasing energy and commodity prices and falling consumer demand have denied food producers the opportunity to come up for air after a bout of shocks, like the pandemic and invasion of Ukraine. This is alongside regulatory pressures like rises to National Insurance Contributions and a new packaging tax costing the industry £1.1bn. Behind the price tags on supermarket shelves, food and drink manufacturers have been absorbing these costs as retailers compete to keep prices low for consumers.
FDF’s recent State of Industry report showed that businesses expect costs to rise 4.8% over the next 12 months. These costs pressures will reach shoppers.
The solution lies with growth. Government must enable businesses to invest in productivity drivers like technology, skills, R&D and automation to reduce pressure down the supply chain, turn the tide on food and drink inflation and create a more resilient food system.
Government has readied itself for action with the upcoming Food and Industrial Strategies. These present clear opportunities to simplify regulations, cut red tape and ensure that food and drink businesses, big and small, receive a fair share of support to invest in technology and innovation.
New trade arrangements, including with the EU and India, also mark positive steps towards driving growth for UK businesses. Trade with international markets has become complex and challenging, causing global exports from the UK to decline by more than a tenth (12.6%) last year. With government continuing to engage with businesses on the details of these deals, food and drink businesses should benefit from improved access to global markets.
Through trying times, food manufacturers have continued to help families put nutritious meals on the dinner table and fill the nation’s cupboards, fridges and freezers with staples like oats, frozen peas and innovative healthy snacks. With 41% of businesses now having to scale back planned investment in vital investment, it’s critical that government provides the right policy environment to protect the resilience of this vital sector. The groundwork is there, and the inflationary trend can be reversed with the right ingredients for growth.
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Balwinder Dhoot is Director of Industry Growth and Sustainability for the Food and Drink Federation.
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