The UK's problems with food

Views From the Marsh - David Owen

The UK’s problems with food and food security are well documented (we would highly recommend Tim Lang’s book on the subject “Feeding Britain Our Food Problems and How to Fix Them”.)

These include far too much reliance on imports, too much in the way of highly processed and semi-processed food, and a market dominated by a small number of large food retailers, with a focus on very low pricing, acting to squeeze margins up the supply chain, to the primary producers.

Much of the industry is very labour intensive with recent increases in NICs and the NLW significantly added to cost pressures. Who can really say what is happening to profit margins up and down complicated food supply chains?

The chart below compares UK food prices (in 2020) with food prices in the EU-27 and the euro area. Of larger more developed economies the UK is a standout. As of 2020, Eurostat estimate that a typical basket of food purchased in the UK prices was 89% that of the EU-27, 87% that of Germany, 80% that of France, 82% that of Italy and 92% that of Spain.

Could that be having any bearing on what we are seeing with UK food prices now, or across the EU? Further analysis can be found behind the paywall, including observations on some key data releases, which were not flagged on calendars of economic releases doing the rounds earlier in the week (perhaps written with the help of AI).