Ukraine conflict to drive up prices but won’t cause shortage, experts told APPG

The Ukraine conflict will drive up prices of products in the UK, but it should not result in shortages, experts told the Food and Drink Supply Chain APPG on Tuesday (15), calling for a moratorium on HFSS as it is likely to add burden to the sector.

The Food and Drink Supply Chain APPG held a panel event to hear from experts about the impact of the Ukraine conflict on the food and drink supply chain, the challenges the conflict poses for the sector, and what steps the government can take to support the industry at this time.

The APPG heard that the supply chain is “incredibly resilient” and over the last two years has weathered some mighty storms. 

The Ukraine conflict will drive up prices of products in the UK, but it shouldn’t result in shortages. Producers will source products and materials from alternative locations. These may be more expensive, but there are alternatives to Ukrainian and Russian goods, the APPG heard.

Earlier this week we hosted an expert panel exploring the impact of the war in Ukraine on domestic food supply chains.

Read our Top 5 takeaways here https://t.co/1Oxkd0aQJi pic.twitter.com/uyKtxqWMaU

— Food and Drink Supply Chain APPG (@FDSC_APPG) March 17, 2022

The panel, which had experts like Jayne Almond – Director of Policy at the Food and Drink Federation, David Exwood – Vice-President of the National Farmers Union and Emma McClarkin – Chief Executive of the British Beer and Pub Association among others, also highlighted the four main cost drivers which are significant price rise in energy, limited raw materials such as those used in packaging, fertilizers and feed, a reduction in available labour, and a new 35 percent tariff announced on products from Russia.

Ultimately this means increased costs, and it will be consumers who will shoulder this burden, experts said.

The experts have called for a moratorium on all policies which are likely to add burden to the food and drink sector such as HFSS and packaging legislation along with an extension in the 12.5 percent VAT rate for hospitality.

Panelists agreed that the government needed to take a holistic view of food and drink policy tying together everything from farming to trade to education. A long term solution needs to be found on CO2 production rather than jumping from crisis to crisis, and to support the future of the sector, panellists proposed the introduction of a T level specifically for food production.