Food and Drink Manufacturers Facing Ongoing Cost Pressures

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Food Drink Ireland, the Ibec group representing the food and drink sector, has today published its latest Business Monitor, highlighting the continued challenges facing Ireland’s food and drink manufacturing sector, as global and domestic price indicators point to a worsening inflationary environment.

The underlying cost base for Irish food processors remains elevated, driven by persistent volatility in global commodity markets, escalating energy costs, and sustained pressure on agricultural inputs. The latest data from the UN Food and Agriculture Organization (FAO) shows that the overall FAO Food Price Index has reached its highest level since early 2023.

Paul Kelly, Director, Food Drink Ireland said that cost pressures facing manufacturers included:

• Elevated input costs for raw materials, energy and transport
• Continued volatility in packaging inputs
• Lag effects between input cost increases and wholesale price adjustments

Commenting on the current environment, he said:

“The reality for food and drink manufacturers is one of escalating costs and pressure on margins. Global commodity markets continue to be volatile, agricultural inputs remain elevated, consumer sentiment is dropping, and businesses are operating in a highly competitive international environment.

Ensuring that Ireland’s food processing sector remains competitive will require a continued focus on managing input costs and supporting investment across the supply chain”.