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Eversheds comment: Impact of falling UK food prices not universally positive

  • United Kingdom

    04-02-2015

    Commenting on news that UK food prices are falling, Parmjit Singh, head of the food and drink sector at law firm Eversheds, says:

    "The news that food prices have fallen by record levels is not unexpected though it has occurred quicker than initially anticipated. With pressure on the supermarkets to compete with the discounters intensifying, calls for food and drink manufacturers to reduce the price of products have been intensifying for several months. Whilst this is good news for consumers and retailers in the short and medium term, the impact in the long term may not be so good. Many manufacturers especially the small ones will simply go out of business and therefore reduce the level of healthy competition in the sector. Manufacturers will need to continue to innovate and build brands so that they can differentiate their products and hope to preserve a decent margin."

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