Eating into household budgets: the Government’s recipe for food price inflation

20 July 2021

This report looks at the impact UK Government policies will have on food prices for both our food and drink manufacturing businesses and our household shopping baskets across the UK.



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Some of the polices discussed in this report will have an impact on food and drink businesses who manufacture or sell product in Scotland including; the Soft Drink Industry Levy; the Plastic Packaging Tax; the 9pm watershed for TV and online advertising ban for foods thought to be high in fat, salt and sugars; and the Reform to Extended Producer Responsibility for packaging.

The Scottish Government is moving ahead with additional policies and regulations that will place further cost on Scottish shoppers food bills and food and drink producers. This includes the Scottish Deposit Return Scheme, the Circular Economy Bill and the Scottish Government’s proposed bill to restrict the promotion and marketing of foods high in fat, salt or sugars.

The report shows that food and drink manufacturers have been absorbing rising commodity prices for years, while ensuring the highest of food standards and quality, consumer prices are being kept down. This, combined with the prolonged effects of the Covid-19 pandemic and lower exports due to Brexit, is leaving the sector with squeezed producers’ margins. For this reason, any additional costs that Government policies - from across all UK nations - place on to food and drink businesses will likely be passed to consumers. Our food and drink industry really want to play their part in improving the health of the nation and contributing to a more environmentally sustainable Scotland. However, we believe that the policy proposals analysed in this report are not well-targeted and will lead to unnecessary costs for households.