The business lobby group representing the food and drink industry has warned that food price rises of between 5% and 20% are on the way on essential items like bread and cereals.
The director of IBEC's Food and Drink Industry Ireland Paul Kelly said dramatic increases in the cost of energy, services, labour and ingredients have driven up food production costs, and that companies had no option but to pass on some of these costs to retailers.
Today's warning comes less than a year after consumer groups were applauding the Government for ending the ban on below cost selling which they had argued kept grocery prices artificially high.
The price of wheat has increased by a quarter and more recently there have been poor harvests. Fruit, used in products such as orange juice has increased 35% globally with more increases to come.
There is also a shortage of fish and key ingredients like tomato paste, rapeseed and glucose have all risen in price.
Energy costs are also higher and there are increases in recycling costs. The trade says packaging costs have gone up 10%.
Commercial rates have increased 15% in the last three years while water charges have increased 8%.
And the business group says inflation at 4.9% is amongst the highest in the euro zone and is feeding a spiral of wage demands.
* The IFA President Padraig Walshe has said there is no justification whatsoever for bread prices to rise by 12 cent to 16 cent per loaf based solely on wheat price increases paid to farmers.
Mr Walshe said consumers should not believe that this price rise is totally to do with the price of wheat. 'A 25% rise in wheat prices should translate into an increase of 2.3 cent, at most, in the price of a standard loaf,' he said.
