Food prices in Britain are rising three times faster than G7 nations

Date: March 9, 2011

Food prices in Britain are rising at three times the rate of the world’s seven biggest economies.
Figures from the OECD put UK food inflation at 6.3 per cent, well ahead of the average of 2.1 per cent for the G7 group of nations.

The cost of putting meals on the table is also rising much faster than most of Europe.
The average annual rise in Ireland is only 0.3 per cent, while it is running at 0.1 per cent in France, 0.8 per cent in the Netherlands and 2.1 per cent in Belgium.

The figures will anger British shoppers amid mounting suspicion that UK supermarkets are turning the screw on consumers to boost profits.
The OECD said only Turkey, Estonia, Hungary and Korea had a higher rate of food price inflation among the 34 countries it surveyed.

There is a suggestion that the ‘big four’ supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – have used concerns about increasing global commodity prices to push through unfair increases.
Research by analysts at UBS shows commodity inflation would justify a 3 to 3.5 per cent rise in processed food prices, but UK supermarkets have lifted prices by 6 to 6.5 per cent.

Comment: supermarkets are not the only reason why prices advance faster. Recent UBS research was also suggesting that higher food prices (read retail prices) were to be blamed on rising wages, which also appears a bit simplistic. In my view, high dependency on imports and poor infrastructure are just two of the many factors that impact UK retail prices. It must be said that such rapid price advances reflect increasing import prices and the rising cost of oil.

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