UK staple food prices surge: eggs, milk, and bread costs driven by avian flu, Ukraine war, and energy crisis

The average price of a box of six supermarket own-brand free-range eggs has risen from £1 in 2022 to £1.80 today, according to market researchers Assosia, which compared prices across Tesco, Sainsbury's, Asda and Morrisons for the BBC. The price of four pints of semi-skimmed milk increased from £1.29 to £1.65 over the same period, based on Assosia's data on supermarket budget ranges. A loaf of basic medium slice white bread rose from 65p in 2022 to 74p on average in the big supermarkets, Assosia said.

The increases are driven by a combination of factors. Millions of hens were culled during the UK's worst outbreak of avian flu between 2021 and 2023, reducing the number of laying hens and causing shortages that led supermarkets to impose customer purchase limits. Ukraine, a major supplier of grain, saw grain costs rise sharply after Russia's full-scale invasion in 2022. Energy price hikes following the war in Ukraine hit dairy production hard, as the industry uses significant energy in milking, processing and transportation.

Producer input prices rose 7.7% in the year to April, the biggest increase in more than three years, according to the Office for National Statistics. Over the same period, factory gate prices — the amount producers charge retailers or other wholesalers — rose only 4%. Dairy farmers are being paid 25% less per litre of milk, with many making a loss, according to agricultural analysts The Andersons Centre.

AJ Bell head of financial analysis Danni Hewson said contracts between producers and supermarkets are signed in advance. "Without a crystal ball nobody can know what is going to happen" to producers' and farmers' costs at the moment these contracts are signed, she said. While farmers can ask for more money when a contract is up for renewal, that cannot usually occur mid-contract when energy or fuel prices skyrocket. "So there will be a degree of some of these price increases, obviously, having to be swallowed by some of these producers," she added.

The Competition and Markets Authority's July 2024 investigation into the groceries sector found no evidence that supermarkets were artificially inflating prices. Sales at the UK's main supermarkets rose from about £130bn to about £160bn between 2020 and 2024, but none of the main retailers' profit margins have increased over the last 20 years when sales and operating expenses are accounted for.

Andrew Opie, director of food and sustainability at the British Retail Consortium, which represents supermarkets, said the UK was "one of the most affordable places in Western Europe for grocery shopping". "As food inflation has risen in recent years, supermarkets have ramped up their focus on offering value on everyday staples — in some cases selling products below cost and absorbing the impact through their own margins to deliver savings for customers," he added.