There will “inevitably” be higher food and drink prices at some stage over the coming months, Paul Kelly, director of Food and Drink Ireland (FDI), has said.

He told the Irish Farmers Journal that FDI companies have seen everything go up from transport to energy to raw materials as a result of inflation.

“It’s the perfect storm. Some companies are paying extra to secure supply,” he said.

He said that rises in food prices on shop shelves are going to be an “individual matter” for companies, but warned that they only have a certain ability to absorb costs.

“It’s an inevitability that there will be higher food and drink prices at some stage.”

Companies are doing what they can to absorb the increase, but there will be some degree of food price increases

In the Central Statistics Office (CSO) consumer price index for September, food and drink prices rose 0.4%. Overall, consumer inflation was up 3.7% in September, with increases in energy prices such as electricity and gas, along with an increase in the price of diesel and petrol.

“What consumers are facing in terms of increased transport and energy costs is similar to what companies are facing.

“Companies are doing what they can to absorb the increase, but there will be some degree of food price increases.”

Brexit

A survey of FDI member companies in July of this year found that Brexit had added significantly to trading costs, including transport and logistics and additional administration both for trade with the UK and also for trade with the EU using the land-bridge.

“Transport costs have also been affected by the major driver shortage impacting that sector and for international business, the cost of freight containers has exploded since the beginning of the year,” it found.