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Taoiseach says Ireland heading towards 'war economy', with food costs set to rise

Micheál Martin could not rule out the possibility of shortages of some food items as he said the war will impact on Ireland

Micheal Martin (Brian Lawless/PA)

Hugh O'Connell and Wayne O'Connor

Ireland is heading toward being in a “war economy”, with the Russian invasion of Ukraine set to drive up the cost of food and many other everyday items, the Taoiseach warned yesterday.

Micheál Martin could not rule out the possibility of shortages of some food items as he said the war will impact on Ireland, “particularly in terms of prices of many products”.

It comes as the Sunday World can reveal further details of the warning to the Cabinet last week about the impact of shortages in materials used in food production.

Speaking in London yesterday, Mr Martin said: “I think Europe is capable of feeding itself. I think there will be a very significant issue around grain and it looks very likely Ukraine will not be planting this season. That has very serious repercussions across the continent, which will impact on Ireland. That’s why there have been discussions with Irish farming organisations.

“We have to be honest with people too — the war will have an impact. The precise nature of that impact is yet to be determined, but commodity prices are going through the roof, basically, that will feed into our economy and the big three areas at the moment are the fuel prices, food and general commodities around metals and so on.”

Ministers were warned in a confidential memo last week of possible shortages in natural gas and carbon dioxide used in food processing that could lead to rationing, which in turn could lead to a curtailment in food production.

“There would be significant and immediate implications for domestic food supply and for agricultural incomes,” the Cabinet was told.

Mr Martin said: “There will be an impact on food. I am not clear yet on specific areas of shortages and so on. I don’t want to scaremonger at this stage, I am just not in a position to predict this. But I want to say to people that the war will impact on us, particularly in terms of prices of many products, and that’s probably the earliest manifestation of the war through food and everything else.”

Asked if Ireland was now in a “war economy”, where governments must choose to allocate resources carefully while also meeting vital domestic consumer demands, Mr Martin said: “Not quite yet, but we are heading in that direction.”

Children seek refuge in a bomb shelter in Mariupol. Picture by Evgeniy Maloletka/AP

Meanwhile, a leading retail expert is warning that supermarkets are braced for price increases “in the region of seven to 12pc” from major suppliers, hikes that will have to be passed on to consumers.

Damian O’Reilly, a TU Dublin lecturer in retail management, predicted this will push food price inflation to about 4pc in the coming weeks, hitting consumers hard for everyday products such as bread, milk and poultry.

“For grocery retailers, prices are going up anywhere in the region of seven to 12pc from major suppliers. This will lead to significant price increases,” Mr O’Reilly said.

“That will probably push food inflation to about 3.5pc or 4pc from the 2.9pc it is at the moment.

Last night, Russian ground forces were advancing on the Ukrainian capital, Kyiv, with the British Defence Ministry saying they were 15 miles from the city.

It also emerged that as they continued to pound the port city of Mariupol, the Russian military shelled a mosque there sheltering more than 80 people, including over 30 children, the Ukrainian government confirmed.

Speaking at a news conference yesterday, Ukrainian president Volodymyr Zelensky said about 1,300 Ukrainian soldiers have been killed in fighting since the start of the Russian invasion.

He said it would take Russia to carpet bomb the Ukrainian capital and kill its residents to take the city. He added that “if that is their goal, let them come”.

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