FDF statement on July ONS food inflation fiigures

Dr Liliana Danila, Chief Economist, The Food and Drink Federation (FDF):

“It’s good news for consumers as food inflation continued to fall for another month in July. This isn’t what we’d historically expect to see following a supply chain shock like the war in Iran. This is partly due to the time it takes for these shocks to pass through to consumer prices and partly due to the fact that food manufacturers have learned from the previous energy shock brought on by the war in Ukraine, adapting contracts and diversifying suppliers to keep costs down.

“But supply chain disruption isn’t going away. Alongside geopolitical volatility, extreme weather will continue to put pressure on the price of key ingredients. This makes it increasingly difficult for food manufacturers to shield consumers from price rises and protect their own resilience. It will be very challenging for manufacturers to swallow any higher costs that come as a result of the extremely hot and dry weather we’ve had across Europe this summer.

“The government should prioritise the sector’s resilience – helping businesses to invest in technology, skills for the future and decarbonisation – so that we continue to have a dynamic and affordable food system for years to come.”