Warning: food price hike in coming weeks

SHOPPERS have been warned to expect rapid food price rises in the coming weeks with supermarkets and convenience stores set to pass on the burden of increased costs.

Basics such as bread and cereals are expected to increase in price by at least 10% while fruit juices and products made with them could go up by as much as 15%.

Foods containing tomato, certain oils and sugars as well as fish and anything requiring a high level of packaging are also likely to go up in price.

The warning came from the Food and Drink Industry Ireland (FDII) which blames international crop shortages as well as domestic increases in the cost of labour, energy and service charges for the hike in prices.

FDII director Paul Kelly said that food prices had risen by 3.8% over the past five years — well below the increase in the overall consumer price index of 18% — and producers and manufacturers could no longer absorb the growing costs.

“Industry is at breaking point and has no option but to pass on some of the these costs to retailers,” said Mr Kelly.

“Ultimately these increases are likely to affect retail prices across the board, from large supermarkets to local corner shops.”

Similar forecasts have been made by the Irish Bread Bakers’ Association and the Beverage Council of Ireland in recent weeks.

Among the factors blamed by the FDII are a 25% increase in the cost of raw wheat over the past six months due to poor harvests.

There has also been a 35% increase in the cost of orange juice over the past year, mainly driven by adverse weather in California.

Fish prices also rose by 35% due to poor catches globally while common food ingredients such as tomato paste increased by 10% and rape seed by 30%. A 30% rise in glucose is also anticipated over the course of this year.

On the home front, the FDII is blaming factors such as average wage increases of over 5% last year, hikes in local authority rates of over 15% in the last three years, increased transport, packaging and recycling costs and an anticipated energy cost rise of 13%-19% this year.

Mr Kelly called on the Government to act to ease the burden on the industry.

The Consumer Association of Ireland (CAI), however, was sceptical of the need for such sudden and substantial price increases.