The study, which predicts beef and pork prices will stabilise and that the price of gin will continue to rise, described 2017 as ‘particularly challenging’ on food and drink prices as food inflation hit its highest levels for many years, with the overall consumer price index for December 2017 at 3%, an increase of 1.2% from January 2017.
TUCO’s intelligence report is the first in a quarterly series to be released by the organisation aimed at caterers and suppliers.
“The Bank of England predicts inflation will fall steadily towards its target of 2% during 2018 but uncertainty in the economy fuelled by Brexit, continues to impact on the value of sterling," said TUCO chief executive Mike Haslin.
“With more than 40% of the UK’s food currently imported, currency fluctuations against the Euro and US dollar are making imports more expensive. The prospect of Brexit is also expected to contribute to staff shortages in a number of sectors as EU workers start to leave the UK”
Key findings from the report included:
• National minimum wage will rise to by 4.4% to £7.83 in April 2018
• International tea market prices have risen 10% due to reliance on the import market. Importers of coffee are also paying more due to the weaker pound.
• Sugar tax means as extra 6p will be added to a can of Fanta or Sprite and 8p on a can of Coco-Cola or Pepsi. Some public-sector bodies such as The University of Brighten have already added their own sugar levy, introducing a 10p tax on drinks with a high sugar content.
• British meat continues to attract premium prices, whilst beef and pork prices are expected to stabilise, the latter due to increased supply.
• Butter prices are set to fall after doubling in price last summer.
• Demand for UK Lion quality eggs has risen on the continent as Fripronil contamination in Holland has curtailed production, pushing up prices in the process.
• Poor catch volumes, quota cuts and rising demand are all expected to contribute to rising prices of cold-water prawns.
• Wholesale price of farmed salmon could rise by as much as 50% as the knock-on effect of stocks decimated by sea lice continue to affect supply and compound already low global stocks
• The European Commission made a major reduction in Baltic cod and haddock quotas in 2017 and are expected to reduce them again in 2018 by a further 13%
• Four commodities are spotlighted for monitoring including canned tuna, rapeseed oil as prices have increased by 10% since summer 2017, apple juice following a poor harvest in Poland and cooking wine due to HRMC in 2018 now applying the same rate of duty as standard wine, set alongside a poor harvest in France means excess stocks used for cooking grade wine is in short supply.
• 2017’s harvest across EU wine producers was down 17% year on year with the Agriculture and Rural Development department suggesting 2017 hit a 36- year low due to severe weather. Low supply is expected to lead to higher prices.
• The gin industry continues to grow and UK sales now top £1billion a year. Average gin prices in off-trade have risen to £20 a litre, suggesting a trend towards premium products.
• The report recommends using UK Cox, Russet and Bramley apples, Italian blood and Seville oranges, Nottingham Piccolo parsnips and Chantenay carrots, Lancashire sprouts, savoy cabbage, leeks, beetroot, kale, Worcestershire purple sprouting broccoli and French pink fir potatoes.
• It recommends not using yellow courgettes, runner beans, garden peas, broad beans, coloured cauliflower, apricots and outdoor grown rhubarb.