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Sunday, November 04, 2012

It's going to get worse

A booklet from Defra, the Government's agriculture department, says the price of food in Britain has risen by a third since the credit crisis began in 2007, and shoppers on lower incomes are compromising on the quality and healthiness of food because of this.

Defra figures show that those on low incomes have cut down on fruit and vegetables. Fruit prices have risen by 34pc since June 2007. Those with incomes in the bottom tenth have cut the calorie content of their food purchases by 9pc since 2007. A third of the food that shoppers buy is on some sort of promotion. Sales of the lower-priced brand were up by 40pc year on year. Supermarkets have expanded its economy range and started producing smaller packs of vegetables

It's likely to get worse. Prices are now increasing at just 2pc a year – this is likely to be the calm before another violent storm. Poor harvests and rising populations are forecast to push food inflation up. The Food Affordability Barometer, developed by European Food & Farming Partnerships (EFFP) in conjunction with Morrisons supermarket, expects food inflation to peak at about 4pc by the end of 2013.

"Over the coming months we will see inflation across the sector in the prices of grain-based food products, and in the following months in the prices of meat and dairy products,"
said Sion Roberts, senior partner at EFFP. Grain and soya prices have risen as a result of poor harvests, and this feeds through to higher meat prices as the cost of feeding the animals rises.

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