Industry groups have called for Government action to stem business costs and thereby minimise the impact of impending food price rises.
Ibec's Food and Drink Industry Ireland (FDII) group warned that food price rises of 5 to 20 per cent on items like bread and cereals are on the way.
Its director, Paul Kelly, blamed increases in the cost of energy, services, labour and ingredients for driving up food production costs, and said companies had no option but to pass on some of these costs to retailers.
FDII said bread, breakfast cereals, soft drinks, as well as canned, packaged and frozen foods were all likely to cost more in coming weeks and months.
"The industry is at breaking point and has no option but to pass on some of these costs to retailers," said Mr Kelly. "Ultimately, these increases are likely to affect retail prices across the board, from large supermarkets to local corner shops."
Inflation in December rose to 4.9 per cent, the fastest rate in four years, and last month's figures are expected to be even higher. However, food inflation has been pegged to under 2 per cent last year following the abolition of the groceries order ban on below-cost invoicing last March.
Now, however, rising costs threaten to undo the stability of food prices. FDII claims packaging costs have gone up 10 per cent, rates are up 15 per cent in three years and water charges have increased 8 per cent.
"There's only one way we're going to control retail prices, and that's by controlling gas, electricity, waste management charges and other costs which are affecting the competitiveness of business," said Tara Buckley, chief executive of the grocers' federation Rgdata.
FDII says the cost of wheat has risen by 25 per cent in the last six months and fruit and fish by 35 per cent. Other food ingredients going up include tomato paste by 10 per cent, rapeseed by 30 per cent and glucose, which is expected to increase by 30 per cent.
Mr Kelly said production costs had been reduced "to a minimum" but that despite this a number of long-established companies had either closed or significantly downsized.
However, Irish Farmers Association president Pádraig Walshe said there was no justification for bread prices to rise by between 12c and 16c per loaf. He said a 25 per cent increase in wheat prices should translate into an increase of 2.3c, at most, in the price of a standard loaf.
Farm gate wheat prices this harvest had improved by about €15 to €20 per tonne after declining steadily for the last decade. He said that despite lower prices to farmers in recent years, the benefit was not passed to consumers.