Posted: 06/04/2022

Ukraine crisis set to add further cost and supply pressure to food & drink

Russia’s invasion of Ukraine will add to the cost and supply pressures already being felt by fine food retailers across the UK, key figures have warned.

Representatives of delis, bakers and farm shops said the economic consequences of the conflict would reach far beyond the borders of the countries directly involved. Since Vladimir Putin’s forces entered Ukrainian soil in late February, relations between Moscow and the West have broken down and oil and gas prices have risen sharply.

Nick Carlucci, director at Berkshire-based importer and distributor Tenuta Marmorelle, stressed that the war represented a truly “horrific situation” for those directly involved.

With Italy highly reliant on gas supplies from Russia, the cost of drying pasta has almost trebled in recent weeks, Carlucci said.

Meanwhile, UK Flour Millers director Alex Waugh said Russia and Ukraine accounted for almost a third of global wheat exports.

“Although much of what they produced from the harvest in 2021 has already been shipped, there is some that remains in store,” he said. “There are also medium-term concerns about the prospects for the next harvest in August/September and what may be available.

The price of wheat on the London futures market rose 28 per cent between 16th February and 3rd March, Waugh added. As well as feeding directly into bread, wheat is critical in the preparation of eggs, meat and other food, he pointed out.

George Fuller, chairman of the Craft Bakers Association, said the cost of bread and baked products was “likely to increase”, particularly at the next harvest. “We may also see some disruption to the supply chain, sooner rather than later, if stored wheat is not exported from Ukraine or Russia,” he added.

Barbara Cossins, proprietor at Dorset’s Rawston Farm Butchery, said she had seen a “definite” impact on demand since Moscow’s invasion of Ukraine affected pump prices on UK forecourts.

“The fuel crisis is having an effect,” she said. “People do one shop at a supermarket rather than drive around smaller businesses. Customers are telling us they are watching their fuel use.”

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