The price of pasta in Jersey could go up by as much as 30% due to poor wheat crops, while coffee is also set for an above-inflation price increase, a major Channel Island retailer has warned.
Co-Op Chief Executive Officer Mark Cox said these two staples in particular were expected to rise in price because of supply chain issues, although more increases are expected because of a “perfect storm” of rising energy and fuel costs combined with the impact of Brexit and the pandemic.
The subject of this week’s Bailiwick Express podcast, Mr Cox said that the industry was braced for price increases, although supermarkets were doing all they could do mitigate the impact on customers, including investing in technology, reducing waste, expanding affordable ranges and discounting.
“We are seeing above inflation prices increases on coffee and pasta is also a particular issue at the moment,” he said. “That is a weather-related impact on the crop and we’re hearing stories that pasta will increase by roughly 30% because there is a shortage of that product.
“You’ve got those issues around crop failures etc that normally exist in the supply chain so it isn’t across the board. We are also seeing some price decreases and we’ve taken the decision to invest further in some prices to make sure we can hold a stable basket for customers.
“Across the spectrum there will always be some products above inflation moves, and coffee and pasta are the two more noticeable ones that are coming through."
CLICK TO LISTEN: Co-op CEO Mark Cox was the interviewee on this week's Bailiwick Podcast, 'How will rising global food prices affect the Channel Islands?
Overall, however, prices increases are expected. In the UK, where Jersey and Guernsey get most of their food, the cost of everyday items is rising at a faster rate than at any time in the last three decades, and wages are failing to keep up.
Recently, Tesco chairman John Allan warned that “the worst is yet to come” on rising food prices prices, which could increase by as much as 5% by the spring.
Mr Cox said that the Channel Islands would not be immune from these international pressures.
“Our experience is, you’re seeing a lot of price changes coming through from suppliers,” he said. “You’re in this perfect storm of rising energy and petrol prices, together with the implications of Brexit and the pandemic, which have all had an impact on costs in the supply chain.”
Mr Cox said that he thought the era of artificially low food prices was over, although consumers could still find well-priced products, such as the Co-op’s ‘honest value’ range.
He added that the customer-owned society was also working with food banks and the food-sharing app Olio to cut down on waste.
However, Mr Cox did call on the Government of Jersey to remove GST on everyday food items – a message which has equal resonance in Guernsey, as it considers introducing a goods and services tax to help plug a £85m gap in its public finances.
FOCUS: More islanders turning to food banks as inflation bites
How will rising global food prices impact the Channel Islands?
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