Another blow to households as food prices increase 7pc
THE price of some of the most popular food in supermarkets has risen by up to 7pc in the last eight months, an Irish Independent survey has found.
As householders struggle with soaring petrol prices and the prospect of an interest rate hike next month, Irish consumers will not escape the impact of massive worldwide food price hikes.
A basket of some of the top-selling branded groceries comes in 7pc higher in major supermarkets than the same goods surveyed by the National Consumer Agency last summer.
This includes significantly higher prices for staples such as bread, butter, cornflakes, cheese and biscuits.
Food analyst Joe Gill predicted that record global prices for basic foodstuffs such as milk and cereals will hit shoppers hard in coming months.
The United Nations FAO index out last week showed that world food prices are at an alltime high -- wheat and coffee have doubled in a year, cocoa is up 25pc in just two months, while dairy prices rose by another 4pc last month.
Although the impact of rising world prices has been mitigated in Ireland by strong competition amongst retailers, price hikes will inevitably be passed on to consumers unless there is a dramatic collapse worldwide, said Mr Gill, of Bloxham stockbrokers.
High world food prices were a double-edged sword for Ireland, he said. "On the consumer side, it's not at all good news. On the other hand, for food companies and farmers, rising prices for grain, dairy and meat are very welcome."
Central Statistics Office figures show that Irish food prices overall have been stagnant in the last year.
Food and beverage prices have risen just 0.3pc in the last 12 months, but some items are up substantially, reflecting world trends including: flour up 13pc; cereals up 6pc; butter up 7pc; cocoa up 23pc; and soft drinks up 7pc.
Consumers are also getting around price increases in many cases by trading down to cheaper own-brand goods or availing of special offers.
Although Irish shoppers were traditionally very loyal to branded groceries, own-brand products now account for a third of weekly grocery purchases. Experts predict this figure will soar to 40pc by 2015 and 50pc by 2025.
Meanwhile, the International Monetary Fund has warned that "the world may need to get used to higher food prices".
IMF economists said that a large part of the surge in food prices was related to temporary factors like the weather. "Nevertheless, the main reasons for rising demand for food reflect structural changes in the global economy that will not be reversed," they said.