Cooking oil rationing is ‘temporary measure’, say supermarkets; consumer confidence plummets

Daily news Economy

UK supermarkets are rationing cooking oil due to supply-chain problems caused by the war in Ukraine, the world’s biggest supplier of sunflower oil.

The British Retail Consortium said restricting supplies is a temporary measure with the rationing introduced to ensure there is availability for everyone.

Demand on limited supplies is pushing prices higher with an average one litre bottle of own-brand sunflower oil now costing £1.26 – a 12p rise and increase of more than 10% since January this year, reports the BBC.

Iceland is limiting its customers to one bottle of sunflower oil per customer and said it has been forced to return to palm oil for some of its products, having previously moved away from it for environmental reasons.

Richard Walker, the managing director of Iceland said it is a move he “never wanted” to have to make. Walker said: “We will prioritise any other oils that are out there, and the majority of those 250 products will move to rapeseed oil. But there’s about 50 products – hopefully, temporarily – that will have to switch back into palm oil because that is the only other viable option due to processing properties or significant quality impact on the final product.”

Higher prices and cooking oil rationing

Rapeseed, sunflower and olive oils are all being rationed by some supermarkets as Russia’s war in Ukraine has hit the production of sunflower oil and wheat, impacting food supply chains in the UK and the rest of the world.

The shortage of sunflower oil has wide implications with manufacturers also feeling the effects. It is a key ingredient in many staples such as biscuits, crisps, mayonnaise and oven chips meaning higher prices will inevitably be passed on to customers.

Tesco became the latest supermarket to announce it is rationing cooking oil with a three bottle limit for its customers. Waitrose and Morrisons have already limited their shoppers to two items each with other supermarkets saying they are monitoring the situation closely.

In a statement Tesco said they have “good availability of cooking oils in stores and online” with “plenty of alternatives available” for customers to choose. “To make sure all of our customers can continue to get what they need, we’ve introduced a temporary buying limit of three items per customer on products from our cooking oil range.”

Asda has not yet taken any measures to limit its customers supplies while Sainsburys said they have “no plans” to introduce rationing.

Sterling drops and consumer confidence plunges

Elsewhere, sterling has dropped to an 18 month low with consumer confidence nearing an all time low and inflation hitting levels not seen for decades.

The Financial Times reports that Friday’s 1.44% fall in sterling’s value against the dollar – to $1.284 – follows “weak retail and consumer confidence figures.”

Data released by research company GfK shows that consumer confidence in April plunged to a near record low since records began in 1974, evidencing the impact of the cost of living crisis.

Figures from the Office for National Statistics (ONS) show that for the second consecutive month UK high street sales fell with March’s 1.4% contraction far worse than the 0.3% fall forecasted by a Reuters poll.

The steep decline is being driven by plummeting online sales which saw a 6.9% fall in February compounded in March by an even steeper collapse of 7.9%.

ONS director of economic statistics Darren Morgan said consumer spending has been hit by the cost of living crisis, adding: “Online sales were hit particularly hard due to lower levels of discretionary spending.

“Fuel sales also fell substantially, with evidence suggesting some people reduced non-essential journeys, following record high petrol prices, while food sales continued to fall, dropping for the fifth consecutive month.”

Leave a Reply

Your email address will not be published. Required fields are marked *