The industry body representing food and drink producers here is warning that businesses are facing a jump in input costs in the new year because of the soon to be introduced hike in the minimum wage.
In the budget, the Government approved an increase from €11.30 to €12.70, following a recommendation from the Low Pay Commission.
But Food Drink Ireland (FDI) claims the change will hit business costs for small and medium-sized firms in particular.
"The challenges associated with high inflation are likely to shift to increased labour costs arising from the forthcoming increase in the national minimum wage in January," said Jonathan McDade, Deputy Director of Food Drink Ireland.
"This will pose a challenge to the food and beverage sector as it tries to manage staff retention with increased input business costs, throughout the supply chain."
"It is also worth noting that many businesses will be managing a significant transition to a Living Wage, pensions autoenrollment, and other significant labour market changes over the coming years."
The latest FDI Business Monitor covering the third quarter shows that commodity prices stabilised during the period.
The cost of energy was also much lower compared to the same three months in 2022, despite recent increases in prices.
During September, food and non-alcoholic drinks were 7.8% higher than the same month last year, but just 0.4% more than in August.
Retail sales volumes for the three months of the quarter were up 2%, but the value of sales rose 3.4%.
