Food and Drink manufacturers ‘facing ongoing cost pressures’
Beer production remains the most important sector within the drinks industry in terms of indigenous manufacturing, but the sector is facing cost pressues
Food and Drink manufacturers are facing ongoing cost pressures, the latest Business Monitor by Food Drink Ireland shows.
Food Drink Ireland latest data published today (19 May) highlights the continued challenges facing Ireland’s food and drink manufacturing sector, as global and domestic price indicators point to a worsening inflationary environment.
According to the Ibec group representing the food and drink sector, the underlying cost base for Irish food processors remains elevated, driven by persistent volatility in global commodity markets, escalating energy costs, and sustained pressure on agricultural inputs.
The latest data from the UN Food and Agriculture Organization (FAO) shows that the overall FAO Food Price Index has reached its highest level since early 2023.
Cost pressures
Paul Kelly, director, Food Drink Ireland said that cost pressures facing manufacturers included elevated input costs for raw materials, energy and transport. He also cited continued volatility in packaging inputs and lag effects between input cost increases and wholesale price adjustments.
Commenting on the current environment, Kelly noted that reality for food and drink manufacturers is one of escalating costs and pressure on margins.
“Global commodity markets continue to be volatile, agricultural inputs remain elevated, consumer sentiment is dropping, and businesses are operating in a highly competitive international environment,” he added.
“Ensuring that Ireland’s food processing sector remains competitive will require a continued focus on managing input costs and supporting investment across the supply chain.”
CSO Wholesale price Index
Meanwhile Simon MacAllister, partner at EY Ireland, speaking in relation to the CSO Wholesale Price Index April 2026, said that pressues on suppliers are unlikely to ease anytime soon.
“The latest CSO Wholesale Price Index figures points to a two‑speed dynamic in producer prices. While there has been only modest growth across most sectors over the past year, including food (1%), manufacturing goods (1.4%) and construction (2.0%), energy prices have risen sharply.
“Wholesale prices for all energy fuels rose 32% month on month and by over 42% in the 12 months to April 2026, underscoring the continued impact of geopolitical disruption on global energy and commodity flows.
“Even in the event of a full reopening of the Strait, these pressures are unlikely to ease in the near term given the time required for supply chains to normalise, production to restart, and inventories to rebuild.”
He said that limited substitution across key products, including petrochemicals and fertilisers, alongside ongoing supply chain adjustments, continues to place upward pressure on input costs which they expect to see factored into wider prices in the coming months
“While wholesale electricity prices were 18% higher than April 2025, they remain around 66% below their August 2022 peak following the Russian invasion of Ukraine.”
