Wholesalers in the food industry have warned the government that prices will be hiked as fuel prices escalate due to the Iran war.

The food sector is concerned about supply chain issues such as rising fuel prices threatening their businesses after the Strait of Hormuz was blocked.

In a letter to chancellor Rachel Reeves seen by The Sunday Times, wholesalers warned that increasing fuel prices would “severely impact the long-term sustainability of the UK’s food and drink supply chain”.

It continued: “Wholesalers operate on significantly lower margins and supply other businesses, including many on the high street, rather than selling directly to consumers.

“If prices for fuel continue to rise, wholesalers will be forced to pass the costs on to local businesses, which in turn will drive up prices and food inflation.”

They urged the chancellor to extend the emergency 5p cut to fuel duty, which was leveraged in 2022 when the war in Ukraine started.

A government spokesperson said: “We know businesses are paying more because of the war in the Middle East. This is not our war and that is why we did not join it.

“We are determined to keep costs down, which is why we have extended the 5p fuel duty cut twice until September and will continue to monitor the situation.”

The Food and Drink Federation has warned that food inflation could reach as high as 10% by the end of the year, with major brands already having to raise prices.

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