The FDF has urged the government to protect the £42bn food & drink manufacturing industry, after its latest report revealed food industry costs rose faster than inflation in 2025.
Data published this morning by the FDF showed production costs jumped 4.4% on average in 2025, compared with a 3.6% increase in the Consumer Price Index reported by the ONS.
Smaller businesses have been squeezed even harder, with a 5.3% increase.
The industry, which employs almost half a million staff across the UK, has been under pressure for a number of years thanks to spiralling input costs, geopolitical uncertainty, changing regulation and low consumer confidence.
In 2025, the growth in UK food production insolvency rates since 2019 was nearly triple that of the wider manufacturing industry. The conflict in the Middle East and rising energy prices have added further strain to businesses.
Rapidly rising energy costs were a concern this year, the FDF said today. With energy embedded in every stage of the manufacturing process, the sector is calling to be included in the British Industrial Competitiveness Scheme to mitigate these costs.
FDF chief executive Karen Betts urged the government to back the sector, which represents a fifth (19.3%) of total manufacturing employment.
“The last six years has been a rollercoaster of regulatory change combined with geopolitical shocks, all driving inflation and the cost of living crisis,” she said.
“More often than not, manufacturers are now running to stand still, investing to maintain operations rather than to fit them for the future. But if we want a sustainable, resilient food system fit for an island nation, we need companies to be investing in future technologies, new manufacturing methods, new packaging materials and new, healthier ingredients and products.
“We need government to back the future of food manufacturing in the UK by ensuring we’re at least on a par with automotive, aerospace and other sectors.
“It can do this by helping us handle soaring energy costs, as they are with other sectors, mitigating the risks for SMEs investing in new technologies, ensuring engineers and scientists can access training for our sector, helping companies use the latest trade deals, or improving access to R&D funding to nudge consumers towards healthier products.”