Wholesale food price inflation was back on the rise in August, growing to 9.3%, the latest edition of the CGA Prestige Foodservice Price Index reveals.
Fish prices soared to 22.7% in August from 5.0% in July, with low exchange rates and high oil prices combining with increased concerns over future tuna supply and ongoing lice problems affecting salmon.
Oils and fats (15.4%) and milk, cheese and eggs (14.7%), also saw double-digit inflation in August.
The only category to see deflation year on year in August was sugar & confectionary, where prices fell by 2.1% compared to last year.
Meat prices also fell to a four-month low, thanks to improved supplies in the UK, but was still more expensive than in August 2016.
The inflation rate grew by more than two percentage points from 7.0% in July, and follows two months of reductions.
Foodservice price inflation was well ahead of historical averages throughout the summer months, and is significantly higher than consumer-side inflation as measured by the Office for National Statistics.
Key factors driving inflation include 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.
The index also highlights possible future pressures in categories including fruit and vegetables caused by labour shortages.
The 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 & 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.”
CGA commercial director Graeme Loudon said: “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.”
