FDF Inflation Response February 2024

David Thomson, CEO, Food and Drink Federation Scotland said:

“It's good to see food and drink inflation continue to fall, to 5.0 per cent in February from 7.0 per cent in January. This reflects prices stabilising across food and drink supply chains, including energy, alongside manufacturers' continued and sustained efforts to keep prices down for shoppers.

Food and drink price inflation should continue to ease in the coming weeks. But some underlying factors are acting against this, from rising labour costs to erratic weather patterns, like this winter's heavy rainfall across the UK which is impacting agricultural crop yields.

Investment in our industry is also worryingly low if the UK is to be confident in its food security. And the UK government is making food and drink less attractive to invest in with its insistence on UK-wide 'not for EU' labelling. This is an expensive and unnecessary policy that will particularly hit small businesses and exports, and we're urging the UK government to reconsider. There are good, digital alternatives if the UK government wants to monitor food movements in the UK, which in time could also be adapted to ease checks with the EU.”

Background

The February figure is the lowest annual rate since January 2022. The rate has eased for the eleventh consecutive month from a recent high of 19.2% in March 2023, the highest annual rate seen for over 45 years.

The decrease isn't consistent across all goods. While we have seen prices fall for whole milk, butter and frozen seafood by 10.2 per cent, 7.6 per cent and 4.0 per cent. Olive oil is up by 38.9 per cent, cocoa and powdered chocolate drinks have risen by 22.3 per cent and sugar is up by 17.6 per cent.