The Food and Drink Federation (FDF) said current prices were “steeper than anything in recent decades” as it warned that inflation could climb to 5.7% by the end of the year
Food and drink inflation could rocket to 5.7% by the end of the year due to cost pressures on manufacturers “trickling down” to supermarket shelves, a leading industry body has warned. The Food and Drink Federation (FDF) said current prices were “steeper than anything in recent decades”.
The group, whose members produce a quarter of all food and drink sold in the UK, has ramped up its inflation outlook due to escalating cost pressures. It’s now predicting inflation to hit 5.7% by December, having previously estimated the rate to be at 4.9% in September and 4.8% in December.
The group’s study of long-term trends revealed that between January 2020 and July 2025, food and non-alcoholic drink prices surged by 37% – compared with a 28% rise for overall prices. Some products have experienced particularly sharp increases, with sugar skyrocketing by 56%, whole milk by 46%, and cheese by 31%, according to the analysis.
The FDF highlighted that UK food inflation has outpaced other European countries in recent months, including France, Germany and Spain, suggesting that domestic policies have played a significant role. It pointed to a higher rate of employer national insurance and new packaging taxes as major burdens on the sector.
Food manufacturers have been swallowing rising production costs over recent years, but are increasingly having to pass these onto consumers through higher prices in shops, according to the Food and Drink Federation (FDF). The FDF’s lead economist, Liliana Danila, stated: “Looking at the longer-term picture, today’s prices are steeper than anything in recent decades.”
She further explained that spikes in energy and raw ingredients prices had now stabilised, meaning inflation was being “fuelled by the financial impact of domestic policies, now trickling down to supermarket shelves”, reports Bristol Live.
Karen Betts, the FDF’s chief executive, said the UK was an “outlier” against comparable European economies, adding: “The costs are such that companies can no longer absorb them and are having to pass at least some of them on to consumers. As this autumn’s Budget looms, it’s critical that Government does not add further to the already high costs of regulation in our sector.
“We’ve been hit by rising taxes, employment costs and a new packaging tax. We’re calling on Government to help us turn this tide by partnering with industry to attract investment, accelerate productivity growth, boost skills and grow exports across our sector.
“This will help counter inflation and secure a more resilient future for UK food and drink manufacturing.”
The Government has been contacted for comment.
