FNLI: War and levies continue to drive up food prices

As if cost pressures were not already high enough, the food industry is once again facing another uncertain factor. The ongoing unrest in the Middle East is causing fluctuating energy prices, more expensive logistics, and rising costs for packaging and raw materials. According to FNLI, this is further increasing pressure on the affordability of groceries.

Costs continue to rise

According to FNLI, the effects of the international unrest are being felt throughout the entire supply chain. From transport and production to packaging, costs are continuing to rise across multiple areas. Producers are particularly concerned about the combination of higher and sharply fluctuating prices.

A survey among FNLI members shows that more than three-quarters of food manufacturers view the impact of the situation in the Middle East as significant or even very significant. For many companies, it remains difficult to fully pass those higher costs on to customers.

On top of that, many producers have already been under pressure for some time. High energy costs, excise duties, and consumption taxes have been creating additional financial burdens for quite a while, according to the industry association. Economists say the rising costs could feed into new pricing rounds and more expensive groceries later this year.

Call to The Hague

FNLI is therefore urging the Dutch government to introduce measures aimed at easing costs. The organization points to the importance of stable and competitive energy prices and is calling for no additional national levies on electricity, gas, or packaging.

At the same time, FNLI is warning against a further accumulation of costs. The industry association specifically mentions a possible sugar tax, higher excise duties on alcoholic beverages, and additional levies on packaging. According to FNLI, those measures could further increase pressure on companies, which would ultimately be reflected in higher prices on store shelves.

Concerns are also growing across Europe

The warning is not limited to the Netherlands. FoodDrinkEurope and other European supply chain organizations are also raising concerns about rising costs. They are calling on the EU and its member states to ensure companies continue to have access to affordable energy, raw materials, and essential resources. FNLI supports that call. Director Cees-Jan Adema says: “Food manufacturers are doing everything they can to limit price increases as much as possible, but affordability is a shared responsibility.”

Fnli.nl