Food prices 'set to soar'

The price of food and drink is set rise due to spiralling business costs, it was warned today.

The price of food and drink is set rise due to spiralling business costs, it was warned today.

Food and Drink Industry Ireland (FDII) said bread, breakfast cereals, soft drinks, as well as canned, packaged and frozen foods are all likely to cost more in coming weeks and months.

Dramatic increases in the cost of energy, services, labour and ingredients have been blamed for driving up food production costs.

“The industry is at breaking point and has no option but to pass on some of these costs to retailers,” said FDII director Paul Kelly.

“Ultimately, these increases are likely to affect retail prices across the board, from large supermarkets to local corner shops.

“In the last year food prices have increased by only 1.8%, but input costs have increased by a multiple of this.

“This is simply not sustainable and food companies must recover these costs.

“While little can be done to tackle rising prices on inputs sourced abroad, such as raw materials and packaging, the Government has the power to address many of the business costs hitting Irish producers.”

The organisation warned that 12 different factors are pushing up food prices.

They include the cost of wheat rising by 25% in the last six months, fruit and fish increasing by 35%, and other foods going up including ingredients such as tomato paste by 10%, rapeseed by 30% and glucose is expected increase by 30%.

Packaging materials, energy costs, recycling fees, distributions costs and wages have also risen.

“In recent years industry has reduced costs to a minimum by using more efficient modern production technologies,” continued Mr Kelly.

“Despite this, a number of long-established companies have either closed or significantly downsized their operations. Failure to recoup these massive cost increases in the market would inevitably lead to job losses.

“It is important for everyone to recognise the reality of doing business in Ireland before whipping up a frenzy about consumer rip-offs, which are clearly untrue.

“It is unrealistic for businesses to absorb numerous input cost increases without increasing prices. Unfortunately, food producers have no alternative.”

FDII is the representative body for the Irish food and drink industry and is a business sector within IBEC.

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