Food price rises and gaps on supermarket shelves could last well into 2027 even if the US-Iran war ends soon, shoppers have been warned.
UK fruit and veg growers have warned that soaring energy costs mean higher prices and shortages of of goods such as tomatoes and peppers could start hitting home this spring.
Milk and potatoes prices are expected to increases sharply later this year, say supply chain experts, while meat, chicken, fizzy drink and beer prices could also soar.
Experts also warned of smaller portions – so-called “shrinkflation” – when it comes to treats like chocolate, biscuits and fish and chips, as producers look to cut rising costs.
Darren Jones, No 10’s chief secretary, warned last week that “long tail” impact of the Iran conflict could last up to eight months after any deal to reopen the Strait of Hormuz.
But food producers and experts told The i Paper that the negative effects may last even longer – predicting that higher prices and possible shortages could run deep into 2027.
Why some price hikes are still months away
The Food and Drink Federation (FDF) has warned of 9 per cent UK food inflation by the end of 2026. It would add £470 to average annual shopping bills, according to recent analysis.
Britain’s fruit and veg growers reliant on glasshouses have been hit by both higher fertiliser prices and soaring energy prices.
Some may have to decide to cut short their season soon to minimise losses – sparking warnings of price rises and possible gaps on the shelves for tomatoes, cucumbers and peppers from May.
The National Farmers Union (NFU) has warned the price of milk and products from arable crops – like bread, potatoes and cereals – could start increasing in the next three to six months because of higher fertiliser and red diesel prices.
NFU president Tom Bradshaw said farmers were “understandably worried” about getting enough red diesel and fertiliser for their combine harvesters and to boost crop growth over the summer.
Red diesel, a cheaper fuel for farmers to use in agricultural vehicles was 76p per litre last year, latest figures put it at 104p.
Shipments of fertilisers have largely stopped since the war with costs across the board up on pre-war prices. Yara International, one of the world’s biggest fertiliser producers, has warned a lack of fertiliser could drop yields by up to 50 per cent.
“Focus is also rapidly turning to longer-term impacts from the autumn onwards,” Bradshaw told The i Paper. He said farmers would have to make “critical decisions” are made about how much to plant for next year.
Soaring shopping bill set to continue in 2027
Scott Walker, chief executive GB Potatoes, warned this week that the “inevitable” price rises for his own industry may not happen until next year. He told Sky News that farmers’ 2027 contracts with supermarkets would have to reflect a doubling of red diesel and some fertiliser prices.
Professor Aled Jones, director of the Global Sustainability Institute at Anglia Ruskin University, said the problems facing farmers meant the price hikes would continue in 2027.
“For farmers, some of the impacts from red diesel and fertiliser costs will have a longer tail, so the impact on prices on the things like bread, cereals, potatoes may not come until autumn, [and continue] into next year,” he told The i Paper.
Dr Derek Watson, an associate professor in cultural management at the University of Sunderland, said the difficulties faced by farmers meant “we will see reduced yields this year – but next year it could be worse”.
He told The i Paper: “What’s happened already [with the Iran crisis] is going to have reverberations in the medium to long term. Mostly definitely food price increase will continue well into 2027.”
Why CO2 shortages would make things even worse
Supply of carbon dioxide (CO2) could be disrupted should the Iran conflict last into the summer, under the Government’s “reasonable worst-case scenario” leaked last month.
CO2 is required for the slaughtering of pigs and chickens, and in the production of beer and fizzy drinks. It is also needed for the plastic packaging needed to prolong the shelf life of baked goods and salads.
Jones said extra cost of getting CO2 “could feed into meats, chicken, beer and fizzy drinks getting more expensive”.
There could even be shortages of some red meat and chicken products. Dr Watson said major CO2 disruption “could mean less meat and poultry products in the worst-case scenario”.
Why fish portions are suffering from ‘shrinkflation’
Dr Watson warned that that some manufacturers and outlets could turn to “shrinkflation” – smaller portions or cheaper ingredients – to deal with rising cost pressures.
“With chocolate bars and biscuits, you could see further shrinkflation,” he said.
Some chocolate manufacturers have previously cut the amount of cocoa content and added cheaper ingredients such as fruit and fillings when their own costs have increased.
Andrew Crook, president of National Federation of Fish Friers (NFFF), told The i Paper that some fish and chip shops that used to sell large portions of fish “will have had to cut down”.
He said fish and chip prices would rise this year because of multiple cost pressures: energy bills, delivery, packaging and “cod prices being at an all-time high”.
There was the risk of further closures in the sector, Crook warned – though he said fish and chip shops appreciate that “we are still being supported by our customers” since the Iran war began.
Yara International warned last week that the Iran war could lead to the “dramatic consequence” of food shortages in some of Africa’s poorest communities.
The FDF has said British shoppers should not be concerned about shortages at the moment since manufacturers remained “agile”. But the body has warned that Iran-related disruption will push up prices.
Ministers have said CO2 supplies are not currently a concern. The Government has helped restart a bioethanol plant in Teesside so Britain produce more CO2 of its own.
While the Government has attempted to calm fears, Sir Keir Starmer has warned that even when the Strait of Hormuz reopens, it will not be a return to normal.
A Government spokesperson said it was taking the effects of the Iran war “very seriously” and is “actively monitoring the potential impact of the conflict on the food and farming sector”.
They added: “The UK has a resilient food system and we do not expect any change to food availability. We are continuing to meet with stakeholders including farmer’s unions to share information on rising fuel and oil prices.”