New border checks ‘threaten resurgence’ in foodservice price inflation

By James McAllister

- Last updated on GMT

New border checks ‘threaten deceleration’ in foodservice price inflation

Related tags Inflation Cga Foodservice price inflation Foodservice price index Supply chain

Apprehension is growing about a resurgence in foodservice price inflation as a result of new border checks, the latest CGA Prestige Foodservice Price Index reports.

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 that there will be no further postponements to these checks, concerns are arising among food importers about disruptions including import delays, port queues, empty supermarket shelves and an upswing in inflation that will particularly affect food prices.

“The planned new border checks may put momentum back into inflation,” says James Ashurst, client director at CGA by NIQ.

“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.”

It comes as the Index recorded an inflation rate of 13.8% in December, dropping from 15% the month before​.

However, the pace of deceleration remains ‘slower than anticipated’, despite moderation in price rises and the market stabilising.

The majority of Index categories maintained double-digit year-on-year inflation in December, and the vegetables category recorded a rate above 20%, primarily driven by substantial increases in potato prices.

Only one category, oils and fats, achieved deflation, with a 1.1% year-on-year decrease.

“There is a continued and pressing need for operators to remain alert to pricing within their supply chain,” says Shaun Allen, Prestige Purchasing CEO.

“While prices continue to rise, the rates at which they are doing so are slowing currently, however, should the Government’s planned 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.”

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