FDF response to July food and drink inflation figures

Jim Bligh, Director of Corporate Affairs and Packaging, The Food and Drink Federation (FDF), said:

"Today’s figures show that food and drink manufacturers are being squeezed on all sides. Energy prices remain high, and the cost of some key ingredients has surged in recent years. Cocoa prices are at a 45-year high, and both olive oil and butter prices have doubled since 2020.

"With high commodity prices, the new £1.4 billion packaging tax, and increased National Insurance costs, it’s no surprise that many food and drink manufacturers have seen their costs increase by 10% or more this year.

"Manufacturers have absorbed as many of these costs as possible, but consumers will still see higher prices at the till. We expect that high food and drink inflation will persist through the year, so any fresh costs for businesses in the Autumn Budget will inevitably put yet more pressure on shoppers' pockets."

Background

• Food and non-alcoholic drink inflation was 4.9% in July 2025 year-on-year, up from 4.5% in the 12 months to June. This is the highest recorded rate since February 2024.
• Five categories saw inflation in double digits: beef and veal (24.3%), coffee (18.0%), butter (17.8%), chocolate (17.2%) and whole milk (11.3%).
• Prices fell the fastest for: olive oil (-10.6%), sugar (-2.8%), frozen seafood (-2.6%), and rice (-2.5%).
• Production costs rose by an average of 4.5% over a year to March 2025. Over a fifth (22%) of food and drink manufacturers having seen costs increase by 10% or more (FDF Q1 State of Industry report)
• While the rate of inflation for retail olive oil prices is decreasing, prices remain at historically high levels. Prices have more than doubled compared to Jan 2020 (source: ONS)
• Wholesale UK butter prices are doubled compared to Jan-20 (source: ONS)