Boris Johnson insisted ‘I don’t think that will happen’ after Environment Secretary George Eustice said rising CO2 prices will trigger a ‘modest’ price increase in the supermarket
Boris Johnson today said “I don’t think” Britain will see panic-buying as a top Tory admitted food prices look set to rise further over winter.
On a trip to Washington DC, the Prime Minister was asked if he was worried there could be panic-buying in supermarkets, and told Sky News: “I don’t think that will happen.
“I think we’ve got very good supply chains as I’ve been saying over the last few days, and what we’re seeing is the growing pains of a global economy recovering rapidly from Covid.”
It comes after the Tory Environment Secretary said a rise in prices of carbon dioxide (CO2) – used in slaughterhouses – would be passed onto customers.
George Eustice insisted any rise in food prices caused by a surge in CO2 prices would be ‘modest’ and ‘negligible’.
He said: “The impact on food prices will actually be negligible, and there are other pressures on food prices, namely commodity prices, oil prices and so on.”
But he suggested food prices could continue to rise for other reasons such as commodity and oil prices.
Asked if the rise in CO2 prices will be passed onto customers, Mr Eustice told BBC Breakfast: “Yes, but the reason I say it’ll be modest is CO2 is a critical ingredient for some sectors of the food industry, but it’s a very small part of their overall costs.
“And so although the price of CO2 may well increase several fold in order to ensure production to continue, it’s a very very small part of their costs. Costs like labour, rents, logistics, fuel for the lorries to run distribution – all of these are way more significant.”
It comes after the Energy Secretary warned customers should brace themselves for years of soaring bills.
Top Tory Kwasi Kwarteng said he feared recent spikes in wholesale costs which have driven cost surges for power firms could persist.
And the spiralling prices are set to filter down to higher household bills.
Mr Kwarteng told the Commons Business, Energy and Industrial Strategy Select Committee: “I think ‘temporary’ means that it’s a position where the price has spiked considerably… I think it has quadrupled in the last six months, seven months.
“You would expect normally that the price would revert to the mean, it’s not something that we think is going to be sustainable.
“But, of course, we have to prepare for longer-term high prices.”
Last night ministers handed over tens millions of pounds in taxpayers’ cash to resolve the carbon dioxide (CO2) shortage that has hit food supplies.
Industry figures had warned that shoppers could begin to see empty shelves within days due to a shortage of CO2, which is used in the production process for meat and some frozen goods.
The crisis was triggered when a major US-owned fertiliser firm – which produces CO2 as a by-product – halted UK production following a surge in wholesale gas prices.
The Government has brokered a deal with CF Industries to restart production. Taxpayers will fund the firm’s operating costs for up to three weeks and the money won’t have to be repaid.
Mr Eustice admitted there were still challenges in the food supply chain but insisted that Brits would not face shortages in the run up to the festive period.
Despite the deal ending 10 weeks before Christmas he said today: “Christmas is safe, of course.”
A spokesman for the Prime Minister later said: “George Eustice answered this point this morning when he talked about the fact that this is only a small part of the costs that consumers face.
“CO2 is obviously a vital component in the production of food but it doesn’t represent the largest part in terms of costs.
“He said this morning that we would expect any price rise to be negligible.”
The spokesman refused to put a figure on what a “negligible” price rise means.
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