Britain's grocery squeeze is tightening on Irish food exports

The UK’s Food & Drink Federation estimates prices later this year will have increased 50%, since the start of the cost-of-living crisis in mid-2021.

Food prices increasing 50% in five years in the UK have made Ireland’s largest single food export destination a harder place to do business.

The UK’s Food & Drink Federation estimates prices later this year will have increased 50%, since the start of the cost-of-living crisis in mid-2021.

And higher fuel, fertiliser, and energy costs for food producers, along with increases resulting from the Ukraine-Russia war, are still pushing British food prices up.

Food bank usage has reached record highs in the UK, with those on lower incomes unable to afford their normal weekly purchases.

Consumers respond by turning towards private-label products and discount retailers, spending less on non-essential items, and “trading down”, for example from fresh to frozen.

These are unprecedented hard times for British consumers, with the preceding 50% food price rise up to 2021 having taken about 20 years to occur.

In 2025, the UK remained Ireland’s largest single export destination, with export values rising by 14% to €6.7bn, representing 35% of Irish food and drink exports.

This was achieved despite inflation reducing affordability for UK consumers.

But UK food trading conditions continue to deteriorate, forcing some manufacturers to reduce product sizes while keeping prices unchanged, adding “shrinkflation” to consumers’ woes.

The UK’s Food and Drink Federation has called on the government to assist UK farmers, in order to bring some stability for UK consumers. But will there be any help for Irish farmers, much of whose produce is destined for the UK market?

These challenges of doing business in the UK have been described by the Department of Agriculture of the United States, in one of its regular assessments of countries with potential for increased imports from the USA.

The USDA said the UK's €65bn per year consumer-oriented food import market is under mounting pressure from a deepening cost-of-living crisis, with food inflation projected to hit 9% this year.

This has driven consumers away from branded goods, towards private-label products.

But the USDA saw opportunities in value-positioned, health-focused, “free-from”, vegetarian, convenience, and sustainably produced products.

UK agriculture produces only 57% of the country’s food needs. The biggest supplier is the Netherlands, with a 12% share of the value of exports, followed by France and Italy (9% each), and Spain and Germany (8% each). That leaves more than half of the imports coming from other countries, including Ireland.

This year, the cost-of-living crisis is predicted to leave the average British household spending £6,000 (€7,000) on groceries (British households are estimated to spend 11.3% of their annual budgets on food and non-alcoholic drinks).

Meanwhile, higher energy bills will add £225 (€262.37) for those using an average amount of gas and electricity.

Catering for cash-strapped consumers places new demands on food suppliers, whether UK-based or overseas, on top of the uncompromising traceability and quality assurance demands in the UK.

Making things even more difficult are changes this year, making food suppliers and importers responsible for recycling their packaging, incurring the costs of collecting, sorting, recycling, and managing the residual waste. These fees will increase by 7% in October, putting even more pressure on food producers facing ever shrinking profit margins and increasing regulatory costs in the UK.