Rising prices from major producers

27 October, 2021

Food prices increased by 1.2% in August with further increases forecast for the coming months.

The sharp increases have been attributed to severe labour shortages (particularly HGV drivers and manufacturing and production staff), significant supply chain difficulties, poor harvests abroad and packaging shortages. This has been compounded by the increased consumer demand following the first full months' trading for hospitality businesses in the UK in August.

Unilever, who makes PG Tips, Hellman’s, Cornetto, Marmite and Dove, has raised prices by over 4% in recent months – the fastest rate since early 2012. The major producer said the rises are due to ever-increasing costs for everything from shipping and distribution, to the cost of palm oil which has risen by 82% due to labour shortages in Indonesia.

As well as the rising price of palm oil, food manufacturers are facing record prices for rapeseed oil as poor global harvests continue to undermine supply. Rapeseed and palm oil are both major ingredients across food manufacturing, and a price rise in one often influences the other.

Other major consumer producers, such as Kraft Heinz are also warning the British public that these higher food prices are likely to stay, and Nestle confirmed that it too had increased prices, which have risen by 2.1% on the back of higher energy and raw materials costs, as well as transport.

Breweries are reporting price rises of up to 73% for CO2, with energy costs up 57%, beer cans up 20% and packaging 22%, alongside and average increase for vehicle fuel costs of 17%.

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