Food Drink Ireland, the Ibec group representing the food and drink sector, said the country's food and drink manufacturing sector continues to see challenges as global and domestic price indicators point to a worsening inflationary environment.
Food Drink Ireland's latest Business Monitor shows the underlying cost base for Irish food processors remains elevated, driven by persistent volatility in global commodity markets, escalating energy costs and sustained pressure on agricultural inputs.
It also noted that the latest data from the UN Food and Agriculture Organization (FAO) shows that the overall FAO Food Price Index has reached its highest level since early 2023.
Cost pressures facing Irish manufacturers include elevated input costs for raw materials, energy and transport as well as continued volatility in packaging inputs and lag effects between input cost increases and wholesale price adjustments.
Paul Kelly, Director at Food Drink Ireland, said the reality for food and drink manufacturers is one of escalating costs and pressure on margins.
"Global commodity markets continue to be volatile, agricultural inputs remain elevated, consumer sentiment is dropping, and businesses are operating in a highly competitive international environment," Mr Kelly said.
"Ensuring that Ireland's food processing sector remains competitive will require a continued focus on managing input costs and supporting investment across the supply chain," he cautioned.
