Eating into household budgets: the Government’s recipe for food price inflation

The report looks at the impact on industry and consumer food prices of seven different policies coming from either the sustainability or public health policy arenas. 

It argues that food and drink manufacturers have been absorbing rising commodity prices for years, while ensuring that consumer prices are being kept down. This, combined with the prolonged effects of the Covid-19 pandemic and lower exports due to Brexit, is leaving the sector with squeezed producers’ margins. For this reason, the additional costs to industry from Government policies will likely be passed to consumers, leading to an annual increase of food and drink shopping per household of £160.

Our industry wants to see a fit and healthy nation, but we believe that the policy proposals analysed are not well-targeted and will lead to unnecessary costs for households.

Scotland

Some of the polices discussed in this report will have an impact on food and drink businesses who manufacture or sell product in Scotland including; the Soft Drink Industry Levy; the Plastic Packaging Tax; the 9pm watershed for TV and online advertising ban for foods thought to be high in fat, salt and sugars; and the Reform to Extended Producer Responsibility for packaging.

The Scottish Government is moving ahead with additional policies and regulations that will place further cost on Scottish shoppers food bills and food and drink producers. This includes the Scottish Deposit Return Scheme, the Circular Economy Bill and the Scottish Government’s proposed bill to restrict the promotion and marketing of foods high in fat, salt or sugars