Food prices probe launched as families face highest inflation since 1970s

There are concerns that not everyone in the food production chain are sharing the costs, Chris Choi reports

An investigation has been launched into why food prices in the UK are still so high, after the Bank of England admitted it was taking longer than expected for them to fall.

With consumers facing the highest levels of food price inflation since the 1970s, Parliament's Environment, Food and Rural Affairs (EFRA) Committee said it would examine "issues throughout the food supply chain from farm to fork", to assess how profits and risks are shared.

It will also look into external factors on the supply chain, such as imported food and global commodity prices.

Robert Goodwill, the Conservative chair of the committee said MPs want to "get to the bottom of what’s going on".

“We need to strike the right balance to ensure healthy, affordable - and preferably British-produced - food is available to all of us.”

He added: "When many people are struggling to give their families good food at a reasonable price, it's our job as a committee to get to the bottom of what’s going on," Robert Goodwill, chair of the EFRA Committee and a lawmaker from the ruling Conservative Party, said.

“We know that consumers are paying higher prices, but the question is - are the other parts of the supply chain unduly benefiting from that, or are some of them also feeling the squeeze?"

Soaring food prices have cast some doubt over the government’s promise to halve inflation by the end of the year.

How much have food products' prices increased in the past year?

The new forecast comes as the Bank raised the base interest rate to 4.5% from 4.25%, the 12th time in a row that rates have risen.

Inflation, which hit 10.1% in March, is expected to drop “sharply” from April this year, but there are “considerable uncertainties” over how quickly it will decline.

Unexpectedly stubborn food price inflation has put pressure on the Bank’s 2% inflation target, as Russia’s war in Ukraine and poor harvests in some European countries have helped ramp up the cost of living for households across the UK.

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Andrew Bailey, the Bank’s governor, said there had been a “very big underlying shock” to food prices.

He added: “It appears to be taking longer for food price pressures to work their way through the system this time than we had expected.”

“But, as we said before, we are in very unusual times.”

Consumer website Which? said last month that Tesco, which has a grocery market share of 27%, should be doing more to make food more affordable after it posted profits of £2.49 billion.

Head of food policy at the consumer champion, Sue Davies, said: "These results show Tesco is doing very well during the cost of living crisis, while millions of its customers struggle to put food on the table due to soaring grocery price inflation.

"It's clear that Tesco and all the major supermarkets could be working harder to make food more affordable for customers who need help."

Tesco Chief Executive Ken Murphy hit back, insisting his company had "worked very hard" to bring customers better prices.

"The key point I'd make ... is that our profits fell by 7% this year and that is despite the fact that we achieved a record level of cost savings," he told reporters.

"That for me is a very material proof point that we worked very hard for both customers and for colleagues this last financial year."