Hunt told red tape adds to soaring food prices
Chancellor Jeremy Hunt will challenge food manufacturers to do more to bring down soaring prices being faced by households.
The Chief Secretary to the Treasury has already met supermarket bosses and on Tuesday Chancellor will ask food producers to come up with solutions.
Industry leaders say rising costs of labour and ingredients make price rises “unavoidable” but say government could help by easing off on regulations on such things as packaging.
He will also meet the Competitions and Markets Authority (CMA) to discuss the scope of their investigations into the fuel and groceries markets.
Rising food prices in the UK are in line with the EU average and headline inflation fell by 0.3% last month, but food inflation grew to 19.2%.
Mr Hunt said: “High food prices are proving stubborn so we need to understand what’s driving that.
“That’s why I’m asking industry to work with us as we halve inflation, to help ease the pressure on household budgets.”
Chief Executive of the Food and Drink Federation, Karen Betts said: “We are looking forward to discussing the multiple drivers of food price inflation with the Chancellor, which have caused the fastest acceleration of food prices in a generation.
“Despite manufacturers’ best efforts in recent months to absorb rising costs in their margins, these have been both persistent and broad-based – from ingredients to energy and labour – making price rises unavoidable.
“We believe food and drink price inflation is close to its peak, and food and drink manufacturers will continue to work hard to keep prices as low as possible, conscious of the pressure on hard-pressed households.
She added: “Government can help too, for example by urgently reviewing upcoming packaging recycling regulations to make them more efficient, by working with us to address labour and skills shortages, and by keeping to a minimum the labelling changes required of companies as a result of the recent agreement with the EU on the movement of food and drink to Northern Ireland.”
The food and drink manufacturing sector is the largest in the UK, accounting for nearly 20% of total UK manufacturing and employing almost half a million people across the country.