FDF responds to December food inflation figures

Balwinder Dhoot, Director of Growth and Sustainability, The Food and Drink Federation (FDF), said:

“After a challenging year for food and drink manufacturers, food inflation saw a further increase in December 2025. As costs rise across the board it’s clear that households are feeling the squeeze, resulting in a subdued Christmas for the sector. The low UK consumer confidence, coupled with the prospect of continued geopolitical volatility, is concerning for food and drink manufacturers who face rising costs and tighter budgets themselves.

“Tackling rising prices and food security is a priority for industry and government alike, and these challenges underscore the need for government to better incentivise investment and productivity growth in our sector. This will help protect the sector from future shocks and help manufacturers minimise price rises for consumers.”

Background

• Food and non-alcoholic beverages prices rose by 4.5% in the 12 months to December 2025, up from 4.2% in the 12 months to November
• Prices fell for seven categories, with the largest drops for: olive oil (-13.8%), flours (-6.5%), and sugar (-2.1%). Prices rose the fastest for beef and veal (27.2%), chocolate (15.5%), whole milk (14.6%) and coffee (13.7%).
• Between January 2020 to December 2025, input production costs, excluding labour costs and other costs (such as regulatory costs or financing costs), increased 39.9% for UK food and drink manufacturers. This is above the rise in food and non-alcoholic drink rises of 38.6% over the same period
• In November 2025, 61% of adults in Great Britain reported an increase in their cost of living compared with the previous month. Of those who reported an increase in the cost of living, 95% reported their food shopping had increased in price. 39% are cutting back spending on essentials as a result (ONS)
• In 2025 food manufacturers faced a new EPR packaging tax, costing £1.1bn, and changes to National Insurance Contributions (NIC) costing £410m, alongside rising ingredient prices