Hospitality and catering companies like Compass Group PLC (LSE:CPG) and Mitchells & Butlers PLC (LSE:MAB) could face an acceleration in food inflation as a result of changes to border checks, the CGA has warned.
New paperwork requirements for EU exporters of animal and plant products are set to be implemented by the UK government in February.
In April, the British border forces will then begin physical inspections for imports of these goods.
Shaun Allen, boss at hospitality consultant Prestige Purchasing, said: “There is a continued and pressing need for operators to remain alert to pricing within their supply chain.
“Should the government’s planned border changes come into force, we may begin to see the rate of inflation rise again.”
Throughout 2023, the food service industry, which covers any sector producing food outside of the home, has suffered from double-digit inflation rates in many ingredient categories.
Foods like potatoes and vegetables maintained an above 20% inflation rate in December, while most other categories remained at double-digit pace.
Oils & fats were the only exceptions, achieving a 1.1% year-on-year decrease.
James Ashurst, client director at CGA, said: “December’s figures continued a welcome respite in inflation across foodservice in the second half of December.
“There are some positive indicators for 2024, including growth in consumer confidence and drops in interest rates and energy bills, but these checks risk derailing the sector’s fragile recovery.”