Food inflation reaches highest annual rate sign March last year, statistics show

Eilidh Farquhar
·3-min read
Food inflation accelerated to 3.3% in January.
-Credit:Getty Images


Food inflation has reached its highest rate in a year, including a significant jump from the end of 2024. The Office of National Statistics (ONS) reported that overall food and non-alcoholic drinks inflation rose to 3.3 per cent in January.

This is up from two per cent in December 2024 and the highest annual rate of food inflation recorded since March 2024.

According to statistics gathered by ONS, prices seemed to fall the fastest in pastas and couscous (5.9%) and jams and marmalades (3.2%). On the other side of the scale, edible offal recorded the highest rise in inflation with 20.2 per cent. This was closely followed by butter (18.3%) and olive oil (16.6%).

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Treats such as confectionery saw a 5.7 per cent rise, while fresh or chilled vegetables followed closely behind with a 3.6 per cent rise. Sugar was seen to fall by 2.1 per cent and frozen seafood had a 2.6 per cent decrease.

On top of inflation impacting everyday life, the Food and Drink Federation (FDF) has reported that agricultural commodities (crops and livestock) are also putting an upward pressure on prices. On average the prices of these commodities have risen between March and November last year, but this has varied across categories.

In terms of cereals and sugar, they were 13 per cent cheaper in 2024 than they were in 2023. However, diary, meat and vegetable oils prices rose.

Cocoa is one of the main commodities impacting manufacturers.
Cocoa is one of the main commodities impacting manufacturers. -Credit:Getty Images

One major product that is impacting manufacturers is cocoa - which has seen its global production decline in the last three years. The 13 per cent drop in 2024 has led to the worst shortage in 60 years and tripling prices since 2022. As climate change and underinvestment continue to hit West Africa, retail chocolate prices will keep rising - 14.1 per cent in January alone.

Butter supplies are also very tight as bad weather impacted UK production. Wholesale butter prices have continued to rise since October 2023, and this can be witnessed on the shop shelves as retail butter prices have risen for the fourth consecutive month in January, by 20.2 per cent.

Manufacturer costs will also take a hit with the upcoming rises to the National Insurance Employers contributions, increased to minimum wages and higher labour costs as a result of the Employment Rights Bill. This overall means that food prices will see rises of over two per cent for the remainder of the year.

Balwinder Dhoot, director of Industry growth and sustainability at the FDF, said: “Whilst food and drink manufacturers continue to work hard to keep costs down for consumers, we saw food and drink price inflation surge to 3.3 per cent in the first month of 2025, up from 2 per cent in December 2024. Rising energy and water bills as well as higher commodity prices, like dairy and cocoa, are all having an impact on production costs.

“Unfortunately, this month isn’t likely to be a flash in the pan for rising food and drink prices. We’re yet to see the full impact of increasing labour costs, with changes to both National Minimum Wage and National Insurance Contributions coming into force in April, and we expect to see this filter through to shoppers over the coming year."

He added: "We urge government to work with industry to simplify regulation and bring business costs down to help protect consumers from rising prices."

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