New border checks risk fuelling food inflation

The Government is set to implement new paperwork requirements for EU businesses sending animal and plant products to the UK from the end of January, with physical inspections commencing in April.

With assurances there will be no further postponements to these checks, food importers have “raised concerns” regarding disruptions such as import delays, port queues, empty supermarket shelves and an upswing in inflation that will particularly affect food prices.

Inflation rise

Prestige Purchasing CEO Shaun Allen said: “There is a continued and pressing need for operators to remain alert to pricing within their supply chain.
“While prices continue to rise, the rates at which they are doing so are slowing, however, should the Government’s planed border changes come into force, we may begin to see the rate of inflation rise again. Good data and market insight is imperative to avoid missteps.”

This majority of categories measured in the index maintained double-digit year-on-year inflation in December, with the vegetables category recording rates above 20%, primarily driven by “substantial increases” in potato prices.

Just one category, Oils & Fats, achieved deflation, with a 1.1% year-on-year decrease.

Fragile recovery 

This followed a 15% drop in food inflation in November last year, its lowest level since 2022, as measured in the previous index​.

CGA ​by NIQ client director James Ashurst said: “Last month’s figures continued a welcome respite in inflation across foodservice in the second half of December.

“Nevertheless, rates remain at exceptionally high levels, and the planned new border checks may put momentum back into inflation.

“There are some positive indicators for 2024, including growth in consumer confidence and drops in interest rates and energy bills, but these checks risk derailing the sector’s fragile recovery.”