Tesco to ration cooking oil purchases as war in Ukraine hikes food prices | Supply chain crisis

Tesco has become the latest supermarket to ration cooking oil as the Russia-Ukraine war chokes off the flow of sunflower oil to the UK food industry, further raising the cost of popular items such as crisps and chips.

Most of the UK’s sunflower oil comes from Ukraine and the war has had a devastating impact on availability as exports ground to a halt. With firms left scrabbling to source other vegetable oils, the price of cooking oil in the shops is about a 20% higher than a year ago.

Tesco has introduced a buying limit of three bottles per customer across its entire cooking oil range. The UK’s biggest retailer says it has good availability of cooking oil but on its website a small number of vegetable oils are out of stock.

Tesco is following in the footsteps of Morrisons and Waitrose which have already limited purchases to two a person. Waitrose said it was “closely monitoring the situation and working with our suppliers to ensure customers continue to have a choice of cooking oils”. Sainsbury’s and Asda have yet to take any action.

As well as being a cupboard staple at home, sunflower oil can also be found in hundreds of products, from ready meals to crisps, and biscuits to mayonnaise.

Tom Lock, founder of The British Snack Company, which makes hand-cooked crisps for sale in pubs, said that after potatoes, its other key ingredient was sunflower oil.

“Sunflower oil is the industry standard for snacks,” said Lock who explained the company had been forced to switch to rapeseed oil. “It is impossible to get sunflower oil in any quantity. You just can’t get it. We’ve secured enough rapeseed to get us through to August, but we are paying three times as much for it as we were for sunflower oil a year ago.”

Lock said it was inevitable that price increases would be passed on to the customer. “We’ve already done one price increase to our customers this year,” he said.

As an interim step to make sure foods such as crisps, breaded fish, frozen vegetables and chips remain on sale, the Food Standards Agency (FSA) has said suppliers can switch to using rapeseed oil and allow their labels to catch up. Shoppers should look out for stickers on packets and on shelves explaining any recipe change, it advises.

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The British Retail Consortium (BRC) said some retailers had put limits on cooking oil purchases “as a temporary measure to ensure availability for everyone”. Andrea Martinez-Inchausti, deputy director of food, said that where sunflower oil had been substituted retailers would “change product labels as soon as possible”.

Gary Lewis, of oil importer KTC Edibles, said that vegetable oil prices had eased off their recent highs but were still “way up” on before the war. Other factors, such as the crop problems linked to Covid and the climate crisis, as well as the competing demand for biofuels, were also underpinning the market, he said. “Prices are still extremely high and that will contribute towards the high inflation around the world.”

On Friday, Indonesia, the world’s biggest palm oil producer, announced it would ban exports of cooking oil and its raw materials to reduce domestic shortages and hold down skyrocketing prices. President Joko Widodo announced the ban, a day after hundreds of people protested in the capital against rising food costs. It begins next Thursday and will last for an undetermined length of time.