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UK Food Inflation Rises, Urging Bold Government Action

Opinion

Business Honor
06 June, 2025

Rising food inflation demands urgent government action to support UK producers and stabilize the sector.

Inflation of food and drink to 3.4% in April 2025—and predicted to average 4.3% for the year—should serve as a clarion call. Behind the figures is a building crisis for British food producers, who are fighting increased energy prices, commodity price shocks, and punitive regulatory taxes such as the £1.1 billion packaging levy. These pressures have compressed manufacturers, compelling numerous ones to pass costs on while retailers maintain artificially low prices to consumers. An industry gasping for air after pandemic disruptions and geopolitical shocks like the invasion of Ukraine.

The context requires government action to be taken in bold terms. The Food and Drink Federation report suggests companies anticipate costs rising by almost 5% next year, and these rises inevitably being pushed down to consumers. Left unaddressed, inflation will chew away household budgets and threaten the long-term health of the industry.

Promises of government on the next Food and Industrial Strategies provide hope, but the promises have to translate into action. Streamlining regulations, reducing red tape, and providing a level playing field investment support to big and small food companies are necessary actions. No less crucial are policies that promote investment in drivers of productivity such as technology, skills, R&D, and automation. These advances will provide a stronger supply chain, reduce costs, and reverse inflation.

EU and India trade deals are promising but complicated. The administration should stay close to business to ensure these agreements bring tangible benefits, particularly in the light of UK exports declining by more than 12% last year.

Food producers have continued to provide food for families, even while facing many challenges. But 41% now cut back on essential investment, threatening the future of the industry. The government needs to take this opportunity—delivering the correct policy framework to secure this industry and defend consumers. With the ingredients for growth, the inflationary tide can and should be turned.