September 7, 2008

Era of Cheap Food is Over, Claims Expert


FOOD prices will remain high over the long-term in Britain and around the world, the Prime Minister's chief scientific adviser warned.

Professor John Beddington said that, while there may be a slight reduction in prices over the next few years, he predicted it would not be enough to bring supermarket bills down to the levels of a few years ago.

His warning comes as experts say the era of falling food prices is over and households will have to get used to spending more of their budget at the checkout.

A typical trolley of food has risen in price by 8.3per cent since the beginning of the year, according to new figures.

The price of meat and fish was up 22.9pc since January, while the cost of fresh fruit and vegetables was up 14.7pc, a study for the BBC by retail analysts Verdict Research found.

Mr Beddington said: "In the next two or three years, I think there may well be some decline in food prices . . . not dramatic, and I don't think to anything like the sort of level we saw four or five years ago.

"So, I think we are going to have to expect to have - and this is throughout the world and not just in the UK - higher food prices.

"The world population is increasing by approximately six million people a month. That's more than the size of the Great Britain population in a year.

"That's the background, and there's absolutely no reason to believe that will slow down. It may indeed be slightly higher than that."

The survey comes after high street data from the British Retail Consortium, BRC, released on Wednesday showed that the rocketing rate of food inflation slowed markedly last month.

The BRC said food inflation posted its lowest monthly rise for five months to hit 10pc in August. The month-on-month rise was 0.3pc, down from 1.9pc in July and the lowest since March's no- change reading. But the high cost of food is far exceeding the official rate of inflation, with the Consumer Prices Index - which includes shop goods energy and fuel costs, at 4 . 4 pc.

The Verdict survey for the BBC divided household supermarket purchases into 13 categories, with meat and fish showing the biggest increase in pr ice.

General store cupboard items, including tinned foods, registered the next biggest increase at 15 pc.

Laundry and toiletries were up 14.4pc, drink was up 6.8pc, pet food up 6.5pc, cereal and baked goods up 6pc and frozen food up by 5.8pc.

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