Food Prices To Go Up In 2017, Companies Warn

As the world prepares for 2017, food companies have issued a warning for the new year, saying consumers will feel the pinch as the price of the weekly shop has started going up.

A report in Telegraph.co.uk has said this. It has been said that along with the weakening of the pound, the "cyclical upswing" in various commodity markets like sugar and dairy have made raw goods costlier for the food manufacturers of Britain.

Chief executive of Cranswick, the FTSE 250 listed pork producer, Adam Couch said prices in supermarkets will rise, something which will be seen all across in the new year. "We absorb it, the farmers absorb it, the retailers absorb it but eventually the consumers will have to," the Telegraph reported quoted Couch as saying.

Cranswick will invest £50m in 2017 to improve efficiency to tackle inflationary pressure, the report added. Another report in the Telegraph published earlier this month said price rose by 1.2 percent in November, as per the records of Office for National Statistics, from 0.9 percent till October.

It was the highest rise in the consumer prices index since October 2014 and more than the analysts' expectations for the rate to go up to 1.1 percent.

John Duffy, head of Finsbury, a renowned speciality baker which supplies breads and cakes to supermarkets and eateries, warned a rise in prices with the ending of the current stocks and fading of the effect of hedging and the businesses begin to operate at new global prices.

"The last couple of years we have probably had about 2.5pc to 3pc deflation," he said, the Telegraph report quoted him as saying. "But forward buying is now significantly more expensive for anyone buying in sterling," he said.

Andrew Sentence wrote in another October report in Telegraph that a rise in inflation to 2-2.5 percent or more would hit a rise in disposable income and consumer spending. He said the only way the growth of real incomes could be regained would be through picking up the wage inflation to 3 to 4 percent but it could be an unlikely scenario in the post-Brexit days.