Supermarket And Restaurant Bills Set To Soar

By Poppy Trowbridge, Consumer Affairs Correspondent

Grocery and restaurant bills are set to rise as food inflation hits 3.8% before the end of the year, according to new research.

That figure, from food service specialist Prestige Purchasing, means food costs are rising faster than other prices.

Consumer price inflation is currently 1.7%, below the Bank of England's 2% target.

Raw materials are traded openly on global markets and commodity prices often fluctuate, sometimes quite wildly.

But right now a specific combination of bad weather, political conflict and increased consumption is pushing up the price of everything from orange juice to cocoa and pork.

Wheat prices spiked 80% when Russia was hit by drought and political uncertainties in 2010.

Some experts say the current crisis could trigger a similar rise.

The crisis in Ukraine is having an effect on wheat prices

Arabica Coffee is up 53%, partly due to unseasonably dry weather in Brazil.

Pork prices are 5% higher - following the horsemeat scandal and a virus epidemic among US pigs.

Commodity experts say competition for our favourite foods is also an issue.

Brian Smith, a raw materials expert at Mintec, said: "The Russians and the Chinese are putting heavy demand into dairy products and milk products.

The price of chocolate has increased by 1%

"The likelihood of them dropping in price is slim because of that demand."

Wheat prices are vulnerable to the current political uncertainties stemming from the crisis in Ukraine, a key grain producer.

Mr Smith added: "If sanctions stop the Russians from exporting wheat and grains, or if the Russians choose to stop exporting, then wheat prices will inevitably go up."

The cost of fruit has risen more than any other category of food, according to Prestige research.

It is up more than 10%, followed by the price of vegetables and meat, which have risen more than 5% per category.

Even the cost of sugar, jam, chocolate and confectionery is up 1%.

Wine prices have increased by 16% year-on-year.

The average cost of eating out is expected to continue to rise as restaurants pass on the cost of rising food prices to customers.

And more than £19bn will be added to the UK's annual grocery bill by 2018, the equivalent of an additional £850 per family per year, according to figures from retail consultancy Conlumino.

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