Substantial rises in the price of butter and fish

06-Dec-2018 - Last updated on 06-Dec-2018 at 13:36 GMT

Butter up: the price of oils and fats have risen by a third

Increased butter prices have resulted in oils and fats costing over 30% more than they did a year ago, while the price of fish is up by 25%, new data from the CGA Prestige Foodservice Price Index has shown.

Fish and seafood prices are up by a quarter as a result of lower catch quotas and strong demand for cod and haddock, the report said.

Oils and fats, meanwhile, have leapt in price by a third as higher butter prices filtered through into the category over the past 12 months.

Sugar, on the other hand, is the only category to see consistent price decreases, resulting from higher global production and flat demand.

Yet, when looking at a full basket of goods, inflation in 2018 only rose by 3.3%, the data showed.

'Much lower inflation'

Shaun Allen, chief executive of Prestige Purchasing, said: “Many commentators predicted much lower inflation this year, because of the much higher base created in 2017, when inflation was 6.1% following the Brexit-generated falls in the value of sterling.

“But prices have continued their inexorable climb and this pattern may well continue, perhaps sharply, as we progress through Brexit in the months ahead.”

The B-word, meanwhile, leaves the market in an unstable position where food prices are concerned, the report said.

If a no-deal Brexit occurs, it is likely there could be up to a 20% fall in sterling’s value, along with predicted shortages of fresh produce for an uncertain amount of time.

Prestige Purchasing chairman David Read said: “In the event of no-deal, the outcomes are not in our own hands as a nation.

'Disruption to freight traffic'

“For example, if the French were to erect a customs post in Calais in April, this would likely cause severe disruption to freight traffic going in both directions.

“And while the imposition of trade tariffs on imported goods might be ignored by our government, World Trade Organisation rules would oblige the EU to impose tariffs on our food exports, which would severely curtail export demand in some categories.”

The potential threat of a no-deal Brexit, though, is not the only cloud engulfing the on-trade, with CGA group chief executive Phil Tate pointing out that living wage increases and higher business rates continue to hound businesses.

“It’s more important than ever for operators to be well-informed about what is happening in supply markets, especially when prices are on the rise and markets are unstable,” said Tate.

“If margins are to be protected, we must not ignore the importance of optimising supply.”