UK Orange Juice Prices Surge Amid Global Supply Challenges and Increased Costs
The price of own-label orange juice in the UK has risen significantly, increasing from 76p in 2020 to £1.79, marking a 134% rise since 2020 and a 29% increase in the last year alone. Cafes and restaurants charge around £3.50 to £4 per glass, with some, such as a Kent restaurant, charging as much as £9 per glass, including £5.30 for the orange juice portion.
This surge in prices is being driven by a combination of factors including drought, citrus greening disease, flooding, and concentrated supply among a few producers. Brazil's orange crops have been severely affected, pushing prices near $7 per kilo. Global supply has been further reduced due to weather conditions impacting key regions; Spain’s Valencia and Seville oranges are mostly exported as fruit, while Florida's production is at its lowest since the Great Depression because of hurricanes and citrus greening, which also lowers sugar content.
Trade and policy issues also contribute to the price pressures. These include a 10% US tariff on Brazilian orange juice, counter-tariffs by Canada, and some UK tariff removals on fruit imports effective in 2024, though not on all varieties. Despite these factors, higher underlying prices remain the dominant influence.
Additional cost pressures come from packaging regulations under Extended Producer Responsibility, which impose a weight-based fee. A Bank of England report from August associated such regulations with part of the explanation for high food price inflation.
To manage costs, producers are blending orange juice with cheaper juices such as mango, mandarins, and clementines. The availability of cheaper mango purée due to a good harvest in India, along with mandarins being less expensive than orange concentrate, helps reduce costs while maintaining taste.
Global orange juice consumption stands at approximately 2.5 billion gallons annually, with the UK accounting for about 10% of that total. Demand in the UK has declined by around 30% from a peak two decades ago, even as consumption grows in China, India, and parts of Africa.
Price shocks are quickly transmitted internationally and may endure. Retailers like Aldi state they aim to pass savings onto consumers; however, many buyers have purchased frozen concentrate at high prices. The overall volatility in supply complicates the reversal of these price increases.
