Middle East conflict: Impacts and risks

Food manufacturers will work hard to protect consumers from price rises but, even under an optimistic scenario, our forecast is that food inflation will reach at least 9% by December.

FDF is actively  championing our industry through this challenging period – representing members’ interests and providing practical support.   

Find out more about what we are doing to support members and industry. 

FDF’s response

We’re in close contact with senior members of government and policy makers in no.10 and across Whitehall.  

We’re discussing our analysis on the outlook for food price inflation where the energy is impacting already and where we think it will be in the coming weeks and months. 

But even if it reopens soon, it is clear that some costs and price impacts are now inevitable. The scale and depth of crisis depends on how long the Strait of Hormuz remains closed. 

Working with Government

On 16 April, government announced that the British Industrial Competitiveness Scheme (BICS) would be extended to a limited number of intensive energy users in our sector, including sugar, as well as to plastics production.  Further to this we’re asking government to: 

• Urgently consider targeted and time-limited energy support for our sector, to take the heat out of rising food prices and limit the impact of this on headline inflation and interest rates. Consider slowing some current regulatory proposals.  
• Most importantly, ensure that reasonable transitional arrangements and sell-through periods are in place for the SPS Agreement 
• Pause the proposal to introduce the 2018 Nutrient Profiling Model (NPM) into the HFSS regulations while a full evaluation of the regulations is carried out
• Consider changing other regulations, temporarily or permanently, to take the pressure off companies.

FDF member support

FDF members can contact the membership team directly with any concerns, or sign-up for the following: 

Join our member only webinar, FDF member Update on the Middle East, where we provide members with the latest developments and analysis. You can sign up here. 
 
Join the Supply Chain Directors Working Group, to capture the impacts of the crisis on food and drink manufacturers. We’re happy to accept Supply Chain Directors and alternates from our members to this new Group.  Please get in touch via MiddleEastResponse@fdf.org.uk if you would like to join. 
 
We’re also establishing a new SME Forum for the Middle East Crisis, giving smaller food and drink manufacturers a space to share views and insights. In our experience, smaller companies are hit earlier by the impacts of this sort of crisis than larger companies, and we’re keen to hear from our SME members. Please get in touch if MiddleEastResponse@fdf.org.uk

Industry insights

To ensure our policy proposals to government and media activity reflect the reality on the ground,  we’re interested to hear how the crisis is impacting FDF members and the wider industry. In particular we’re seeking information on:  

• Energy contracts and supply 
• Logistics and shipping  
• Packaging and plastics 
• Supply chain relationships: with farmers, suppliers and retailers 
• Trade impacts: including disruption to imports/exports 
• Commodity impacts: both cost and availability.  

And anything else you think we should know, regardless of whether we’ve asked.  The information we’ve received so far has been invaluable in helping us engage with government and the media to ensure that your views and concerns are represented.  

Email MiddleEastResponse@fdf.org.uk or complete our State of Industry survey