British households face ‘£200 extra food bill this year’ due to Iran war

Food and farming experts are calling for the UK government to intervene to tackle rising shop prices before it’s too late.

The President of the National Farmers’ Union (NFU) and the CEO of the Food and Drink Federation (FDF) have urged ministers to save the industry from skyrocketing costs caused by the war in Iran.

Rising food prices cost the average household an extra £200 by the end of this year, the FDF predicted in their most recent forecast.

The industry body wants the government to support businesses at crucial points of the food supply chain with paying their energy bills.

Farming bosses on the other hand are pleading with the Chancellor for the 5p fuel duty increase to be pushed back.

A poll out this week showed that four in five people are worried the Iran war will make food more expensive.

The blockade of the Strait of Hormuz since the end of February has sent oil and gas prices soaring.

The closure has also triggered shortages of fertiliser, which has driven costs up for farmers by up to 70%.

A FDF forecast at the beginning of April predicted that food inflation each over 9% by the end of the year – at a cost of £200 per average household.

CEO Karen Betts told Metro: ‘If the conflict in the Middle East does not resolve quite soon, there is a risk that prices will go higher than that.

‘Energy is embedded in every part of the food supply chain. If energy costs do go up it does have a significant impact on prices.’

This has led to an increase in logistics, moving food around, freight, plastics, packaging and cleaning chemicals.

Electricity prices for most businesses are also due to skyrocket when their contracts renew in the next three to six months.

To stop these costs spiral onto food bills, the FDF is calling on the government to ‘provide some support’ for parts of the food system ‘where energy use is most intensive’.

Examples of the most energy-intensive processes include refining sugar, making bread, roasting coffee and dairy processing.

Betts also wants ministers to delay and review new regulations which, although good ideas, are costly for businesses at just the wrong moment.

These include a move to align food laws with the EU and plans to restrict which food and drinks products are considered ‘less healthy’ for advertising purposes.

Betts said: ‘We are encouraging the government to act. It worries us that we have been giving hem a lot of ideas since the end of march and we have not had much feedback

The FDF’s main call is for ministers to intervene before food costs become ‘baked in’ to prices. If that starts to happen, it will be harder for any measures to reduce inflation.

The problems faced by farmers is just as urgent and could be equally devastating for food prices, NFU president Tom Bradshaw told Metro.

He said they were dealing with ‘an immediate cash flow impact’ caused by rising prices of fertiliser, red diesel and gas.

Red diesel, a cheaper fuel used in agricultural vehicles, was 76p per litre last year, but latest figures put it at 104p, meanwhile fertiliser costs could go up 70% since the Strait of Hormuz was blocked.

The boss said: ‘It is now 69 days since this crisis started and even if there is a resolution immediately that is going to have knock impact well into the future.’

Bradshaw urged the Chancellor to reverse plans to increase fuel duty – a tax on fuels like petrol and diesel – by 5p in September.

It is the result of a temporary 5p cut introduced in 2022, which is now scheduled to be phased out.

The NFU believe that keeping that cut in place will not only help farmers deal with rising prices but support ‘the whole of society’ with the economic pinch.

Also in their sights is the Carbon border adjustment mechanism, which is due to come into force in January 2027 and will make manufacturers pay a levy on certain carbon-intensive imports.

Bradshaw believes that could increase the cost of crucial fertiliser by £50 to £70 a tonne and wants the government to delay its implementation by 12 months.

Saying he was willing to work with the government on support for the sector, Bradshaw added: ‘It is crucial for farmers to continue producing the county’s food for everybody.’

Metro approached the Treasury for a comment.

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