Annual grocery bills will rise by £ 160 per year if the UK government passes on the cost of its new recycling and advertising policies for sweet and savory snacks, industry executives have warned.
Poor families will be hit hardest with an 11% increase in the cost of their purchases, the equivalent of their entire annual expenditure on fresh vegetables, the Food and Drink Federation said.
“The suggestion that we should introduce new food taxes right now is madness. It is an insult to working families in this country to be told what to do by those who cannot imagine how difficult the past year has been, ”said Ian Wright, president of the industry body.
In a report called Eating into Household Budgets: the Government’s Recipe for Food Price Inflation, the FDF put the cost of new government policies on public health and sustainability at £ 8 billion.
He says this is before factoring in potential new taxes on salt and sugar, as outlined in Henry Dimbleby’s recent National Food Strategy report.
Last week, ministers were asked to levy a £ 3 billion sugar and salt tax as part of a ‘once in a lifetime opportunity’ to break Britain’s dependence on junk food, reduce the meat consumption by nearly a third and help tackle the climate crisis following Dimbleby’s report.
Labor has said it is a ‘massive wake-up call’ to change the dial on food education encouraging all ages to eat healthier.
But the industry fears that the cost of future government policies may already put some domestic companies at risk.
The FDF said the new policy to make the producer responsible for post-consumer waste will cost £ 1.7bn, a deposit system on food and drink packaging will cost them £ 850m and the introduction of advertising restrictions on fatty, salty and sweet foods £ 833 million.
“Food and drink makers are nearing breaking point,” Wright said after a year that included a food supply disruption caused by Brexit and Covid.
According to Andy Haldane, former chief economist at the Bank of England, the FDF said local producers were finding squeezed margins as the prices of food items such as grains, sugar and dairy rose by 17% since the start of the year.
“If the government is serious about increasing its level, it must encourage the sector and not accumulate additional costs,” said FDF.