Foodservice meat prices buck overall trends

Meat prices in foodservice have fallen to a four-month low, at odds with most other categories in the sector. 

According to the latest CGA Prestige Foodservice Price Index, overall wholesale foodservice price inflation grew to 9.3% in August 2017, reversing two months of reductions.

Year on year, levels of inflation in August were higher in nine of the 10 categories of food and drink measured by the Foodservice Price Index. Key factors driving inflation included: the weak pound, which is pushing up the price of imports from overseas; and rising oil prices, which are adding to the costs of transportation and packaging.

Although prices in the meat category in August were lower month on month, they were still up year on year. The monthly reduction in meat prices was attributed to improved supplies.

The only category to see deflation year on year in August is sugar and confectionery, where prices fell by 2.1% compared to last year.

Labour

The Foodservice Price Index also highlighted possible future pressures in categories including fruit and vegetables, caused by labour shortages.

The Foodservice Price Index forecasts “little respite for inflation in most food and drink categories in the coming months”.

It believes a weak pound and uncertainty over worker status following Brexit talks may lead to shortages of migrant pickers for domestic fruit and vegetable growers from 2018, weakening supplies and increasing the UK’s dependence on imports.

Christopher Clare, head of consulting and insight at Prestige Purchasing, said: “With the CGA Prestige Foodservice Price Index up over 2 percentage points on last month, we are now experiencing the highest year-on-year movement since the index began. We have seen high increases in nearly every category, compounded by a weak pound and a number of supply issues in key categories.”

Graeme Loudon, CGA commercial director, added: “After a couple of months of a modest easing of pressures, our latest Foodservice Price Index reveals another upswing in inflation. The weak pound and increased oil costs are both conspiring against UK businesses, and specific categories of food and drink are facing added challenges, like weather-related production issues, and changing trading patterns.

“All of these issues are outside the control of the foodservice supply chain in the UK, but by carefully monitoring trends and refining purchasing strategies, foodservice businesses can at least mitigate some of the inflationary impacts.”

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