The war in Iran is coming for Britain's favourite food

The indirect ⁠effects of Iran war inflation are "likely to be largest for food prices".

They were the words of the Bank of England's governor on Thursday while warning over the risks posed to the UK economy by the surge in global energy costs.

It does not bode well for the nation's favourite food: chips.

But a leading figure in the potato industry has told Sky News we won't see the worst until next year.

Scott Walker, the chief executive of GB Potatoes, said the way the industry works means the impact of war-linked costs will be delayed, with "inevitable" increases in 2027.

He was speaking amid government warnings of more than eight months of rising prices once the conflict in the Middle East ends, while the fish and chip shop industry sees an immediate threat to its very existence.

Rising costs for energy, cooking oil and fish are already being reflected in portion sizes or prices, according to the National Federation of Fish Fryers, which fears an acceleration in this decade's trend of shop closures.

When it comes to the humble spud, the cost of the base potato product actually remains weak due to a continuing, Europe-wide glut, according to Mr Walker, though chip shop prices could rise to help account for the extra price pressures already facing fryers themselves.

Follow the latest on the Iran war

Mr Walker explained that the vast majority of UK potato producers work to annual growing contracts with their customers, which give both growers and the likes of wholesalers and supermarkets "insurance" – a certainty over incomes and prices ahead.

"At this moment in time, people shouldn't be paying any more," he said, in good news for buyers of the many raw potato varieties in the shops.

Fertiliser, for example, was already bought for the current growing year ahead of the outbreak of the war, but Mr Walker said the outlook was more bleak.

"Down the line prices will have to rise because we have a lot of costs coming," he warned.

While growers could attempt to claim "exceptional" costs from their customers in a bid to restore some health to margins this year, Mr Walker warned the 2027 contracts would have to reflect a doubling of red diesel and some fertiliser prices.

He also highlighted higher plastic packaging charges, along with raised tax and wage demands imposed by the government.

"The average price was about 65p (a litre) for red diesel last year," he explained.

"Farmers this year have been paying about 140p, but it has dipped back to around 120p."

Mr Walker warned that much would also depend on the weather in the months ahead, with a dry summer forcing farmers to irrigate more using diesel-powered generators.

"If diesel prices remain high, that's going to be a big extra cost," he warned, signalling that planting, irrigation, harvesting and distribution costs were all flashing red.

"Sadly, rising prices are inevitable... Everyone faces rising prices: the cost of collection, living wage, (the) price of electricity for wholesalers. There's a lot of cost in the system."

What about crisps?

Mike Russell Smith, who co-founded the Savoursmiths luxury crisp brand outside Cambridge in 2016 alongside his wife, grows his own potatoes and manufactures the product on site.

He echoed Mr Walker's sentiments over the surge in costs.

He explained that a "massive oversupply" across Europe last year, due to strong crop yields, had depressed prices, but the business, at the same time, was already grappling with a doubling of sunflower oil costs due to the effects of the Russia-Ukraine war.

He pointed to rising costs for labour, harvesting, production and cold storage.

"The softer price of the potato due to the surplus of supply is going to be significantly offset by considerably higher prices in terms of energy, gas, electricity and the sunflower oil we cook the potatoes in," he explained.

On the prospect of price increases for consumers, he added: "In 2027, we'll certainly have to review things in what is a very competitive industry. There comes a point where the costs just aren't swallowable anymore."

The industry 'plea'

Mr Walker argued it was in the gift of government to help ease the burden facing the industry.

He said: "Most of it is out of our hands. The plea to government...unfortunately is a lot of the rules and regulations are adding to the burden, and we call on the government to ease those regulations and help with electricity costs.

"Access to water is a key thing for growing potatoes, so we keep asking for regulation to allow farmers to store water to secure food security."

A government spokesperson said in response: "We are taking the effects of the Iran war very seriously and are actively monitoring the potential impact of the conflict on the food and farming sector.

"The UK has a resilient food system, and at present we do not expect any impact on availability. We are continuing to meet with stakeholders, including farmers' unions, to share information on rising fuel and oil prices."

(c) Sky News 2026: The war in Iran is coming for Britain's favourite food