Why the Rising Price of Food Takes a Bigger Bite out of Welsh Budgets; LOWER STANDARD OF LIVING MEANS WE'RE HARDER HIT

Western Mail (Cardiff, Wales), August 16, 2010 | Go to article overview

Why the Rising Price of Food Takes a Bigger Bite out of Welsh Budgets; LOWER STANDARD OF LIVING MEANS WE'RE HARDER HIT


Byline: DARREN DEVINE

BASIC food prices that have risen by as much as 59% in the past three years are hitting Welsh shoppers disproportionately hard, economists warned last night.

Staples such as bread and eggs have increased by 18% and tea by 30%, according to figures from price comparison website mySupermarket.co.uk The cost of rice has increased by 59% since 2007.

But lower income levels here, with Welsh gross domestic product (GDP) standing at 74% of the UK average, means consumers struggle to absorb the rising prices.

Brian Morgan, professor of entrepreneurship at the University of Wales Institute, Cardiff (Uwic), said the higher level of social deprivation in Wales means many won't have benefited from the reduction in mortgage costs seen in recent years.

He said: "If we say poorer elements of society are going to be suffering the most then as night follows day it follows that Wales will suffer more proportionately than people in the rest of the UK. We have the highest unemployment rate in Wales now (over 9%) and higher levels of inactivity because there are more people who are not in the workforce at all because they're not in employment, education or training."

The new statistics revealed it has become increasingly costly to buy meat, with the overall price of products rising by 10%.

However, there are variations, with the cost of bacon increasing by 9%, but the price of chicken and turkey dropping by 6%. Fish lovers fared better, with the price of fresh varieties down 8%.

Parents were hit particularly hard as the price of food and products for babies soared.

The figures show the price of items like wipes, creams and bath wash are up 38%, baby food and snacks rose by 21% and baby milk and drinks are up 29%.

Even pets are an increasingly expensive drain on the bank account, with cat food up 13% and dog food rising by 20%.

Professor Morgan said rising oil prices mean the cost of basic commodities is likely to continue growing.

He added: "Most economists are forecasting at the moment that commodity prices will remain high for some time.

"Much of it comes from the fact that energy prices are going to rise by about 20% by 2015."

The academic said food prices have also risen as a result of extreme weather patterns producing poorer harvests and the Chinese and Indian economies continuing to grow at about 10% per year.

China and India have a combined population of 2.5 billion - more than a third of the now near seven billion global figure.

MySupermarket spokesman Jonny Steel said while Consumer Price Index (CPI) inflation figure stands at 3.2%, down 0.2% on the previous month, this doesn't represent the whole picture.

He said: "This is especially true when you consider the likes of basics such as bread and eggs increasing in cost by 18% over the last three years.

"Shoppers need to make sure they don't become complacent now the recession is over, as the battle to save money is still very much on."

Meanwhile, the dozens of wildfires raging around Moscow, unprecedented in 130 years of records, has cost Russia more than a third of its wheat crop. …

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