The Food & Drink Federation has urged the government to give food and drink manufacturers financial support with energy bills after the Iran war sent oil and gas prices surging.
Brent Crude oil price futures topped $82 per barrel yesterday, representing their highest price since January 2025. Analysts have suggested it could jump to as high as $150 per barrel if the war – kicked off by the US and Israel at the weekend – continues to spread across the Middle East.
Gas prices have similarly soared, amid Iranian air strikes on key energy infrastructure across the region, with Europe’s TTF benchmark up by about 85% since the end of last week.
The price spike, coupled with extensive disruption to global trade, caused by the closure of shipping lanes around the Persian Gulf – including the vital Strait of Hormuz corridor – has led to fears the conflict could trigger a significant upturn in inflation.
And amid an already challenged economic picture in the UK, the FDF is now calling for clear government action to protect the food sector from further inflationary pressures and disruption.
“It’s too soon to say what the true impact of the conflict in the Middle East will be on UK food and drink,” said FDF director of growth and sustainability Balwinder Dhoot.
“But with the food manufacturers already under strain from years of rising business costs and food inflation running higher than historical averages, seeing the spike in gas prices will be a concern.”
To help bring down food inflation and protect shoppers from price rises, Dhoot said the FDF had “warned government that it needs to support long-term business resilience and investment. We are an essential and energy intensive sector”.
Read more: Iran conflict raises inflation fears as global trade badly hit
His comments follow warnings from horticulture growers in January that the sector already faced significant hikes in energy costs – with electricity standing charges expected to increase by 60%-80% from 1 April, and by an additional 60% by 2030.
Some glasshouse businesses faced up to £1m per year in additional charges, the British Tomato Growers’ Association and the Cucumber & Pepper Growers Association said, with the April deadline creating a “cliff-edge” for the sector.
Given the UK was already facing higher industrial energy costs than other European nations, “giving food and drink manufacturers the same support with energy bills offered to other manufacturing sectors will also help businesses weather this latest energy price spike”, Dhoot urged.
It comes as a report published by think tank the Resolution Foundation today warned the energy price shocks seen this week “risk ruining the good news” of an expected “decent” increase in living standards this year, as laid out in the Chancellor’s spring statement yesterday.
“If recent rises in the price of oil and gas were to be sustained they could add around a percentage point to inflation and £500 on to typical annual energy bills,” the report warned.
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