Unilever has warned that food prices could increase if the government pushes ahead with its plans to promote biofuels.

Reports suggest that the food group has warned that moving to biofuels could push up the prices of foods such as margarine and cause consumers to switch to less healthy animal fats.

Alan Jope, vice president for Unilever, said: “The scale is dramatic. Ultimately there could be supply shortages. The switch from health vegetable oils would have a dramatic impact on public health.”

Last week Unilever reported a 19% increase in half-year pre-tax profit to E2,661m, on sales up 6% at E19,793m.