The Irish Bakery Association (IBA) has warned that, despite the best efforts of the industry, bread prices will soon be forced upwards because of the impacts of Brexit on ingredients costs.
Only 40% of the flour used in Irish bread making is actually produced on the island of Ireland, with the UK and the EU providing the rest of Ireland's bread making flour.
To add fuel to the Brexit fire, last year the UK suffered their worst harvest in 40 years.
Irish flour importers are finding that substitution options are limited in Europe. This is because the Irish consumer prefers to eat a type of bread they’re used to, made with the flour they’re used to. The flours produced on the continent are best suited to their own style of baguettes and bagels and less so to our slice pans and traditional Irish breads.
Ireland also lacks production of yeast or sugar, and produces very little vegetable oil for bakery use. The industry is seeing price hikes on all these ingredients.
As the cost of inputs goes up, the cost of bakery production must follow to maintain the industry’s viability. Gerald Cunningham, secretary of the IBA said:
“Prudent stock-piling of flour before Christmas has kept prices flat to date. We also researched alternative sources of flour. But the MATIF (Flour price index) is currently at a record high causing the market to be volatile.
"It is important for the market to know what is happening, and that without external interventions, price rises are inevitable.”