Food prices expected to rise by 10 pct in 2012

Prices of food are expected to rise by around 10 percent next year, the novinky.cz news site reported on Sunday, citing Czech producers and traders. According to the president of the Czech Confederation of Commerce and Tourism Zdeněk Juračka, the price increase will be caused by a weakening crown, a VAT hike, growing commodity prices on foreign markets and rising costs of transport and energy. A spokeswoman for the Czech Federation of the Food and Drink Industries said higher prices might affect local production as consumers might travel to countries with a lower VAT. Producers have warned pressure on lower prices might lead to a decline in quality. According to the Czech Statistical Office Czechs consumed less meat, milk products, fruit and vegetables as well as alcohol and cigarettes last year. Producers say they believe the trend has continued in 2011.