Proactive Investors - An investigation into why Britain is facing some of the highest food price inflation in close to 50 years has been launched by MPs.
The Environment, Food and Rural Affairs (EFRA) Committee of the House of Commons will examine the earnings of all components from ‘farm to fork’ in the food supply chain.
Importantly, it will analyse whether there is any discrepancy between wholesale and retail prices, as concerns that companies like Tesco PLC (LON:TSCO) or Unilever PLC (LON:ULVR) aren’t passing on falling costs continue to arise.
The report will also consider the costs of global commodities and imported foods.
The FAO world food price index, which tracks the costs of products such as dairy, meat and sugar, dropped by 19.7% year-on-year in April, the latest report found.
This is in sharp comparison to the 19.1% jump in UK food prices observed in March, with grocery inflation rising 17.3% annually in April.
"When many people are struggling to give their families good food at a reasonable price, it's our job as a committee to get to the bottom of what’s going on," said Robert Goodwill, chair of the EFRA Committee.
Overall inflation may start to decelerate during the year, said the Bank of England on Thursday, but potentially at a slower rate than expected due to the persistently high food prices.
Interest rates in the UK rose by 25 basis points to 4.5% on Thursday, the highest levels seen since the 2008 financial crisis.
“We know that consumers are paying higher prices, but the question is - are the other parts of the supply chain unduly benefiting from that?” Goodwill added.