Key facts
- Food inflation is forecast to reach a peak of 6.4% in July next year.
- The Food and Drink Federation attributes rising supply chain costs to fuel price hikes triggered by the war in Iran.
- The FDF has requested government intervention to reduce regulatory costs, such as the renewable packaging levy and new rules on less healthy food promotions.
- The food manufacturing industry incurred a £2bn cost from regulations and tax increases in 2025.
- The FDF warns that continued regulatory uncertainty could lead to manufacturers deferring investment, potentially undermining UK food security.
Food inflation is projected to surge to 6.4% by July next year, primarily due to increased supply chain costs stemming from rising fuel prices linked to the war in Iran, according to the Food and Drink Federation (FDF). The FDF, representing UK food manufacturers, has urged the government to alleviate regulatory burdens, including levies on packaging and new rules for less healthy foods, which cost the industry £2 billion in 2025. Chief executive Karen Betts warned that persistent regulatory uncertainty could deter crucial investments in manufacturing and supply chains, ultimately threatening the UK's food security.
The trade body also cited rising wage costs, with national minimum wage growth outpacing average wage inflation, as a contributing factor to food price increases. Food prices have already risen by nearly 40% since 2020, significantly impacting household budgets. The FDF noted that while manufacturers have adopted longer fixed-price contracts for resources and energy, mitigating some inflationary pressures, the overall outlook remains concerning.
A spokesperson for the Department for Environment, Food and Rural Affairs acknowledged that food security is a national security priority and stated the government is working with the industry to enhance resilience. They highlighted ongoing efforts to reduce living costs, such as suspending import tariffs and supporting farmers affected by drought.