Food costs could leap like fuel due to Ukraine war, warns 2 Sisters boss
Food inflation could rise to 15 per cent as war rages in Ukraine, a Black Country boss has warned.
The chief executive of the 2 Sisters Food Group has warned the UK faces hyperinflation not seen for 50 years.
The prediction from Ronald Kers comes as fuel prices in the West Midlands rose yet again – taking the price at some forecourts towards £1.80 a litre.
Mr Kers, who produces food at factories in Wolverhampton and West Bromwich, fears there is a major threat to UK food security.
He claims input costs in chicken production have risen by 50 per cent in the past 12 months and forecasts food inflation could rocket to 15 per cent by the middle of the year.
The West Midlands-based group has chicken processing factories in Dial Lane in West Bromwich and Lincoln Street in Wolverhampton.
He also pinpoints that there is also a Ukrainian agricultural crisis unfolding that could have massive repercussions for the global commodity supply.
Mr Kers, who is also a former chief executive of Shropshire-based dairy group Muller, said: "The events in Ukraine are an unimaginable tragedy and our hearts go out to those affected and to our Ukrainian colleagues and supply chain partners and their friends and relatives back home. It is an incredibly worrying time and we will do all we can to support them.
"This conflict brings a major threat to food security in the UK and there is no doubt the outcome of this is that consumers will suffer as a result. War disrupts the free flow of trade and the impacts for us are severe. For example, the input costs of producing chicken – with feed being the biggest component – have rocketed. Prices from the farm gate have already risen by almost 50 per cent in a year.
"Before this war began, four to five per cent food inflation was being forecast by mid-2022. But we now could see a hyper-inflationary environment at closer to 10 to 15 per cent – more than it's been for 50 years – if this conflict isn’t resolved quickly.
"Our business is heavily dependent on a stable agricultural sector, but we cannot isolate ourselves from events abroad, even if Ukraine seems like a far away place. Commodities like animal feed and carbon dioxide are vital for us.
"Our chicken doesn’t arrive on dinner tables without farmers. In fact, with no agriculture, there’s no business for us. Our concern is that a lot of people haven’t realised the food production clock is ticking. Ukrainian farmers should be sowing crops in March, instead they’re fighting for their country. If this war is not stopped now, the UK could experience a major drop in supply of products like wheat, barley, corn, rapeseed, and sunflower oil. So a European supply chain issue escalates to become a global commodity price crisis, and none of us can escape this."
Mr Kers said the fresh pressures were being piled on top of the acute inflationary environment there already was.
"This is why we need cross-territorial collaboration food security strategies to bring some order amongst the chaos. The reality is companies like 2 Sisters trade globally, and the smooth flow of trade links between states are vital. Without measures to isolate states from food security risks, ultimately there will be less food and higher prices to pay, with the poorest in society hit hardest," he warned.
