UK facing ‘terrifying’ food and drink price rises, industry warns MPs

‘In hospitality, inflation is running between 14 per cent and 18 per cent, which is terrifying, says Food & Drink Federation boss

Food and drink firms are facing a "terrifying" rises in costs amid worker shortages and supply chain, MPs have been warned.

Ian Wright, chief executive of the Food and Drink Federation, told the BEIS committee that MPs need to think seriously about inflation," he said.

"In hospitality, inflation is running between 14 per cent and 18 per cent, which is terrifying.

"If the prime minister is, as I know he is, serious about levelling up, inflation is a bigger scourge than almost anything because it discriminates against the poor."

Mr Wright said that while there are some shortages on shelves, the UK does have sufficient food.

He added: "We are not going to run out of food but there are some shortages, we have seen some problems with pigs and poultry, with some of these being solved."

Duncan Buchanan, director of policy at the Road Haulage Association, said a shortage of lorry drivers was “not visibly getting better” and that he believed it would be a year before the disruption that has caused gaps on supermarket shelves settles down.

He told the committee there had been "a lot of poaching of drivers" by larger companies offering wage rises of 10 or 20 per cent. Changes made last week by the government to so-called cabotage rules were likely to suppress those wage increases, Mr Buchanan said.

The move means foreign drivers, who had been limited to two drop-offs per trip, can now make an unlimited number of stops.

"We expect cabotage changes to suppress wages. The very people who are going to take advantage of those changes are the people paying the very highest wages at the moment and doing the poaching."

Most of the challenges in supply chains were falling on businesses, not consumers, Mr Buchanan said. "We don't actually have a food shortage, we have supply chain disruption but that doesn't mean we are going to run out of food, or out of anything in particular."

The committee also heard that worker shortages were particularly acute in the UK, compared to other nations. Neil Carberry, chief executive, Recruitment and Employment Confederation said problems in the UK were “uniquely sharp”.

“We have had some long-term shortage issues that we haven’t addressed. Drivers is a classic example of something collectively we’ve been talking to government since long before the [EU] referendum.”

“But clearly we’ve also cut off an inflow of workers to the UK and the number of workers with settled status will diminish over time.”

Mr Carberry said care, food and waste disposal were among the sectors that will be most severely affected

“I think what we are seeing is a global issue caused by a misallocation of resources caused by the pandemic that’s being amplified by the new trading arrangements we are working under. That will probbaly take a little longer to work out because of that.”