Get real with inflation
Sir, Nearly 40% of food is at some stage imported into the UK, so as the pound has fallen so alarmingly we are to expect significant price increases throughout the industry. I would forecast that by this time next year food inflation will be running at anything between 3% and 4%, as all companies will be affected in some way.
In my view, the multiples will have no choice but to increase prices. They are all suffering through difficult times and finding it hard to generate long-term sustainability, for which they need sensible net margins.
The only way this industry can thrive and survive is through inflation, without which there will be dire consequences for both the multiples and suppliers. To keep high employment we must react in a clear, precise way. That means accepting sensible price increases and realising the multiples and total food industry must put through these retail price increases to maintain workable margins.
Stephen Barlow, Euro Food Brands
The world wants Brit food
Sir, The Food & Drink Exporters Association (FDEA) is pleased to see the release of the UK Food & Drink International Action Plan 2016-2020 (‘Food and drink action plan to boost economy,’ 22 October, p5).
FDEA has just returned from Sial Paris, where we created and managed the UK pavilion in which 112 UK food and drink exporters exhibited. We welcome the fact that government is now treating UK food and drink exports as a high priority and we look forward to increased resource being provided to assist exporters in their efforts to grow their international business.
Despite the uncertainty of Brexit, feedback from our members and exhibitors at Sial has been positive. There is continued interest in quality UK products from both the EU and the rest of the world.
John Whitehead OBE, director, FDEA
Sir, In response to ‘Will GSCOP be extended to Booker, Boots and Compass?’ (thegrocer.co.uk, 18 October), whilst there is scope to extend the remit of the GCA, it is not likely her remit could be extended to cover other retail categories. The GCA was appointed in 2013 in response to an investigation by the Competition Commission in 2008 into grocery retail supply in the UK. At that time the Competition Commission analysed the seven categories of grocery retail but did not look at GM, discount or variety. It also said they couldn’t look at wholesalers unless they were part of a corporate group operating grocery stores.
As a result, aside from some notable exceptions in Booker and Ocado, I cannot see that the GCA’s remit can be extended to cover anyone else without a new investigation and, possibly, new law (as pointed out by the CMA). Boots, B&M, Holland & Barrett, Poundland and others can be confident nothing is likely to change quickly.
Mark Jones, food and drink solicitor, Gordons