United Kingdom-Hike in meat prices.

UNITED KINGDOM-RISE IN MEAT PRICES.

Rising meat prices have driven food inflation up to its highest rate since September last year, the British Retail Consortium has revealed.

The BRC Nielsen Shop Price Index (SPI) has reported that annual food inflation surged from 7.5% in January to 9% in February, pushing overall shop inflation to 1.9%. Although this is only half of last August’s peak of 3.8%, it marks a reversal of the falling rate of inflation seen since the summer.

Fresh food, particularly meat, saw the biggest increases, with fresh food inflation reaching 10.2% in February compared to 8.4% the previous month, driven by rising cattle, sheep and pig prices, which have gone up by 9%, 38% and 75% respectively over the past 12 months.

BRC’s director general, Stephen Robertson blamed the rising rate of food inflation on "increasing farmgate prices for fresh meat", adding that "the weak pound has made UK produce more attractive for overseas buyers, restricting supplies at home and pushing prices up."

Although UK farmers have benefited from the falling value of the pound, retailers have been faced with increasingly expensive imports and high prices for domestic meat. As a result, prices for some cuts of lamb, beef and pork have risen by over 50% since last year.

"The cost of meat has been subject to unprecedented increases over the last 12 months," said Natalie Mitchell, the central meat buyer for Waitrose.

It remains to be seen whether such high prices will turn UK consumers off meat. The National Beef Association (NBA) insists that consumers have stayed "remarkably loyal" to British beef, despite rising prices. "There is no sign that the almost constant demand for a more expensive product will falter," said NBA director Kim Haywood.

John Bullock, senior press and communications officer for BPEX, said that domestic demand for pork is "very strong" at the moment, and early signs suggest that consumers will continue to buy British pork despite price increases.

As a niche meat, lamb will be more vulnerable to the recession, but EBLEX predicts that tightening global supplies could secure a second year of strong prices, particularly given low production in New Zealand.