Consumers in the U. K. are experiencing higher rates of inflation than in the U. S.  A fivefold increase in the cost of natural gas and inflation in agricultural inputs including fertilizer, diesel fuel and packaging are, in part, responsible for higher prices at the shelf. The price of food and non-alcoholic beverages increased in December by 16.9 percent over the corresponding month in 2021 and was the 17^th consecutive monthly rise in headline inflation.

In a recent BBC appearance, John Allan, Chairman of the Tesco supermarket chain, injudiciously agreeing with the interviewer who offered a loaded question. His answer supported the suggestion that “Food firms are jacking up prices and taking advantage of the poorest in society”  

The response by Allan elicited an immediate reaction from the National Farmers Union (NFU) equivalent to our Farm Bureau Federation, pointing to higher input costs of raw ingredients and power as reasons for higher prices to chains. The NFU maintain that “a climate of collaboration” would be more helpful than criticizing producers and suggesting that price increases were motivated by a profit incentive in an inflationary environment.

Recently, Tesco and other supermarket chains have made one-time ex gratia payments to producers of cage-free eggs to maintain supply in the face of high feed and fuel costs. For years, the supermarket chains have pressured producers to accept transfer prices that have not allowed for an acceptable return on investment in new facilities and housing and were insufficient to accumulate reserves to survive increases in production costs.