Supermarket shoppers buying eight popular items face price hike under Labour policy

UK supermarket shoppers face a cost hike in dairy and meat products. Milk, eggs, cheese, yoghurts and meat items like pork, lamb and beef could be impacted by a rise in prices as a results of a tax policy change under the new Labour Party government, it has been warned.

Food industry experts are warning the extra costs of inheritance tax increasing for some farmers could be passed on with larger prices on the supermarket shelves. Fiona Peake, personal finance expert at Ocean Finance, cautioned: "We could see price increases start to trickle through relatively quickly—perhaps within a year of the changes taking effect—as farms recalibrate their finances.

"Essentials like dairy, meat, and fresh produce are likely to feel the pinch first, as these are core outputs of UK agriculture. We might see milk or eggs edging up by a few pence, but over time, these small increases could add up."

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Nick Brewer, owner of Sussex vineyard group Oastbrook Estate, said: "This tax was unannounced and has left many farming families beleaguered with no way to resolve the problem without selling their livelihoods." He added: "Capacity will be removed, and large international conglomerates will buy productive land for solar and wind farms as well as intensive farm lots – as seen in the US. This will harm animal welfare amongst other effects."

Legal expert Tom Gauterin, director of Freeths, warned of "widespread increases in food prices", saying: "The foods produced in largest quantity by UK farmers include wheat, barley, sugar beet, potatoes, chicken, pork and beef. The costs of production of all of these will rise if farmers find themselves having to pay inheritance tax insurance premiums in order to keep their farms viable."

Mr Gauterin said: "At this stage it is difficult to tell what price increases may look like as that depends on the response of supermarkets, and Government itself. Supermarkets continue to squeeze farmers (milk prices fell significantly last year), and unless the government agrees to increase farm subsidies – which is unlikely – then it is hard to see just how many farmers will be able to make ends meet if faced with a substantial additional cost.

"And it is just as unlikely that supermarkets would seek to absorb any price increases."