Market fears over the UK’s potential exit from Europe are driving up food and drink costs warns buying specialist Lynx Purchasing. Fresh produce costs have been increasing as uncertainty in the City over the outcome of the referendum on June 23rd has seen sterling fall in value against both the euro and the dollar.
The report published by Lynx said that suppliers were facing the challenge of the weakening f the sterling that has hit the price of imports both from Europe and further afield. Key commodities such as coffee and bananas are traded in dollars also pushing up the prices. The availability and cost of labour and the introduction of the National Living Wage in April have already increased labour costs the report said.
The report also found that food producers relied heavily on migrant labour from the EU for seasonal work such as picking and packing. The producers were worried about the longer term availability of these workers and the effect on their costs in the event Britain leaves.
Higher prices for fuel are also being paid by UK companies shipping from Europe, along with increased costs due to the migrant crisis. Lynx said that hauliers had significantly increased the charges per pallet year-on-year to cover increased insurance costs. The supply chain thrives on certainty and with the forthcoming referendum splitting the polls, ambiguity for food companies on the outcome of the poll is causing uncertainty.