Food and drink prices in the hospitality sector rose by 1.1% in December, with the Foodservice Price Index (FPI) reaching 152.8, NIQ and Prestige Purchasing revealed. This sharp upward movement marked a significant acceleration in inflation to close the year, driven by intense seasonal demand and persistent supply-side constraints during the festive trading period.
The month was characterised by steep increases across high-volume categories. Milk, Cheese & Eggs recorded the highest rise at +1.9%, as domestic price pressures intensified despite continued softening in global dairy commodity markets. Avian Flu-related disruptions specifically reinforced volatility in egg supply chains, compounding costs during a peak usage window. Fruit prices followed closely, rising +1.8% as the market shifted to higher-cost glasshouse production for soft fruits and faced significant yield reductions in Spanish citrus.
Inflationary momentum also remained critically high in Coffee, Tea & Cocoa. Coffee markets continued to trade near multi-year peaks due to adverse weather in Brazil and Vietnam, while cocoa prices remained close to record levels, underpinned by weak West African harvests and exceptionally tight inventories.
The festive centrepiece category, Meat & Poultry, saw inflation accelerate to +1.5%. Strong seasonal demand collided with structural challenges; beef traded at historically strong levels due to tight domestic availability, while poultry markets remained volatile as Avian Flu disruptions influenced supply dynamics throughout December. Oils & Fats and Sugar, Jam, Syrups & Chocolate also contributed to the rising index, highlighting a broad-based inflationary environment where domestic energy, labour, and logistics costs limited the pass-through of any global commodity softening.
The 1.1% month-on-month surge in December is a stark reminder of the volatility that continues to plague the supply chain. While global indices for sugar and vegetable oils showed signs of easing in 2025, the reality for UK operators was very different. Acute supply shocks—from Avian Flu in poultry and eggs to climate-driven shortages in coffee and cocoa—combined with high domestic operational costs to drive prices up significantly just as the sector needed stability the most.
