Food suppliers blame Brexit as record price hikes hit pubs

03-Feb-2017 - Last updated on 03-Feb-2017 at 10:05 GMT

Price hikes: number of price notifications doubled year-on-year

Food companies issued a record number of price rise notifications over the past four months, citing Britain’s impending exit from the European Union as a major cause.

Purchasing specialists Beacon reported a 267% growth in price rise notifications from September to January compared with last year, with average rises higher than the current UK inflation level of 1.6%.

Paul Connelly, managing director at Beacon, said: “These price increase notifications indicate to us a significant shift in mindset from British and European businesses.

“After the Brexit vote in June last year we had about six months of businesses waiting and seeing what Brexit meant to them. That period appears to be over.

“A period of prolonged prudence is likely as the focus sharpens on continuing to help people and businesses control costs and remain profitable.”

Independents hit hardest

Price rises would hit independent businesses hardest and would likely be passed on to consumers if those businesses could not absorb the increased costs, he warned.

Heath Ball, owner of the Red Lion & Sun, in Highgate, told The Morning Advertiser (MA): “The hard part is you can’t explain it. Customers don’t want to hear about produce prices when they’re sitting at the table – they don’t care.

“Everyone knows prices are going up but they don’t want to see it on their bill. You’re expected to take the bite.”

Operators would likely see the price of European fresh fruit and vegetables impacted, as supply shortages due to bad weather and a low exchange rate pressurise prices, said Beacon’s Connelly.

He said: “What operators need to do is be a little bit more innovative in their menus, perhaps a bit more flexible."

'Through the roof'

“If there are certain items that suppliers or their purchasing partners are pointing to with higher than average increases, then this is where operators can have a look at the menu and see if they have scope to swap out broccoli for cauliflower, for instance – just like we’ve had to do over the past 12 months as salmon prices have gone through the roof.”

Stuart Hyslop, managing director for catering and small business at Booker Group, told MA: “There has been cost pressure on commodities, currency fluctuations and there is a forthcoming Budget, however we are working hard with our suppliers to minimise the impact on our caterers.”