Food costs in UK rise three times faster than G7 – Thisismoney.co.uk
By Sean Poulter – 9 March 2011
Figures from the OECD put UK food inflation at 6.3%, well ahead of the average of 2.1% for the G7 group of nations.
The cost of putting meals on the table is also rising much faster than most of Europe.
The average annual rise in Ireland is only 0.3%, while it is running at 0.1% in France, 0.8% in the Netherlands and 2.1% in Belgium.
The figures will anger British shoppers amid mounting suspicion that UK supermarkets are turning the screw on consumers to boost profits.
The OECD said only Turkey, Estonia, Hungary and Korea had a higher rate of food price inflation among the 34 countries it surveyed.
There is a suggestion that the ‘big four’ supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – have used concerns about increasing global commodity prices to push through unfair increases.
Research by analysts at UBS shows commodity inflation would justify a 3% to 3.5% rise in processed food prices, but UK supermarkets have lifted prices by 6% to 6.5%.
Economists Paul Donovan and Larry Hatheway, who co-wrote the report, said: ‘Prices are rising in excess of justifiable cost increases. The UK stands out as having the broadest range of food price increases.’
The big supermarkets and their trade body, the British Retail Consortium (BRC), insist they are protecting shoppers against the worst effects of commodity price rises.
However, that is at odds with figures showing record profits over the past two years, raising millions of pounds to build hundreds of new outlets.
Industry research suggests that many promotions being offered by the big supermarkets are not what they seem. Virtually every price cut is matched by increases on other products.
A report published by the BRC today claims high street food price inflation was 4.5% in February, down marginally from 4.6% in January.
BRC director general Stephen Robertson said: ‘Food inflation appears to have stabilised for now despite on-going pressure from soaring global commodity costs.’
Humphrey Feeds Comment: This is not what we at – just at a time, when farmers need cost of production/commodity price rises – we do not need supermarkets hiding behind reasons like that stated above to not pass on fair cost rises.