The change to Icelandic fishing quotas has had an adverse effect on the availability of cod and haddock, which has caused the price of fish to rise, the latest report from CGA and Prestige Purchasing has found.
The fishing industry has been bracing itself for changes to quotas since June 2019, when the International Council for the Exploration of the Sea (ICES) recommended that Icelandic haddock quotas be cut by 28%. Iceland has been setting its quota limits in line with ICES advice since 2010, so this drop came as no surprise.
Back in June 2016, the Fish and Seafood category of the CGA Prestige Foodservice Price Index was at 95 points, but supply and currency issues have sent it skywards, rising by 72% to 164 points in August 2019. The shortening of the Icelandic quotas, along with the possibility of a no-deal Brexit at the end of October, mean inflation in the category is likely to remain high for some time to come.
Prestige Purchasing CEO Shaun Allen said: “Recent announcements of price increases from major supermarkets are now starting to show through in the Index, with Consumer Price Index (CPI)’s year-on-year inflation now higher than FPI in four out of ten categories. However, Fish & Seafood and Soft Drinks categories show there is still a large amount of volatility in the foodservice market. With the Brexit deadline approaching fast, it is essential that businesses remain vigilant to changes in the supply market and continue to dialogue with suppliers to ensuring risks are managed effectively.”
Elsewhere in the Foodservice Price Index, the Mineral Water, Soft Drinks and Juice category has also spiked. The index recorded an all-time year-on-year inflation rate high of 36% in August, and prices have now jumped by 72% since December 2017. Factors contributing to this steep rise in non-alcoholic beverage costs include the government’s sugar tax, changes in consumers’ tastes and a turn towards more expensive eco-friendly packaging.
Fiona Speakman, CGA’s Client Director of Food explained, “we are seeing major changes in the non-alcoholic drinks market, with CGA research showing that more and more consumers are seeking out premium and healthy options—a trend boosted by the government’s sugar tax. With the terms of Brexit and its impact on the foodservice sector still so unclear we can expect more turbulence in prices over the rest of 2019, and intelligent market analysis and contingency planning are going to be vital.”