Rising Costs from Iran Conflict Prompt UK Food Suppliers to Adjust School and Hospital Contracts

Food suppliers to schools and hospitals in England are set to provide lower-quality items and fewer items for the same price due to rising costs linked to the conflict in Iran, GB News reported. Companies tied into fixed-price public-sector contracts are unable to pass on increasing expenses, leading to constraints that prevent them from raising prices.

Chief executive said suppliers may turn to cheaper imports, lower-quality dairy products like cheeses, and smaller portions to manage costs.

Rising oil and gas prices since the start of the Iran conflict have pushed up costs across the food supply chain. Supply chains have been disrupted by the closure of the Strait of Hormuz, which has affected fertiliser shipments and raised concerns among farmers about future production. The Food and Drink Federation stated that food prices could rise by up to 10 per cent by the end of the year.

Caterers currently receive £2.61 per meal for pupils in England, due to rise by two per cent to £2.66 in September, while food inflation stood at 3.7 per cent in March. A managing director said his company will stop operating at the end of the school year in July.

The business supplies meals to 67 schools in Cornwall and Devon, and he said other providers are facing similar pressures. “It’s just not sustainable and we’re seeing it time and time again,” he said, adding that “the numbers of people exiting the service will continue to grow”.

The warnings come shortly after ministers announced a ban on deep-fried foods in school meals as part of efforts to improve nutrition by increasing the amount of fruit, vegetables and lentils served.