SCOTTISH food manufacturer Simon Howie has said he is fighting hard to keep the prices of his products down following the collapse in sterling, but that “inevitably, there will be short-term pain”.

The comments from Mr Howie, a multi-industry entrepreneur, come as Tesco chairman John Allan said food prices are “very likely” to rise because of the Brexit vote.

Speaking on BBC Radio 4’s Today programme, Mr Allan said that price rises would depend on where the pound settles, but having plummeted 14 per cent against the euro and 17.5 per cent against the dollar since the June 23 vote, he added: “It is likely there will be some price increases going forward - I think is very likely.

"Remember at the moment we have got virtually nil inflation. Inflation I think could nudge up to two per cent or three per cent, food prices would be a part of that," he said.

Food deflation has had a major impact on the fortunes of the UK’s supermarkets as consumer enjoy cheaper prices, but the Brexit vote is likely to change that.

A high-profile dispute between Tesco and Unilever last week proved that issues over the prices of every day goods “have got real”, according to Mr Howie.

Simon Howie supplies a wide range of meat products to supermarket groups under its eponymous brand. In addition, the firm supplies a number of leading hotels and restaurants.

Mr Howie said his business isn’t directly affected by the sterling plunge as it does not import meat, but he said competitors who do would seek to use more domestic produce, causing supply and demand issues.

“Inevitably we’ll have to take short-term pain with that,” he said. “We’ve got long-term relationships with our customers but simply sticking our hand in the air and asking for more money won’t work. We’ve got to absorb it, but ultimately it’s going impact the price of products on the shelves.”

Last year the company made profits of £2.6 million on turnover of £14.7, which was up five per cent.

Mr Howie added that the company was “doing our best to fight off” any potential price rises by reducing costs through improved efficiencies and investment in sustainable energy.

He added: “We don’t have the flexibility to say to our suppliers – farmers and abattoirs – that we will not pay the increases; they’ll tell us the price, that’s the rules of engagement. We don’t have that with our customers.”

In the last month a number of companies have warned of the impact the Brexit vote will have on their business, with staff retention of growing concern.

Mr Allan warned that suppliers are "very concerned" about restrictions on migrant labour after Brexit, as he insisted Britain could not just take highly skilled immigrants.

And earlier in October, Jim Walker of Walkers Shortbread said some of the overseas workers his family’s company employees could leave the country as a result of either changes to their residential status or as a result of a backlash against foreign nationals working in the UK.

The wide-ranging impact of sterling’s instability following the vote has also been illustrated by an announcement on Monday from Microsoft that it was increasing the price of its enterprise cloud products, such as Office 365, by 22 per cent, directly as a result of sterling’s collapse.

And businessmen such as Mr Howie, who has interests in a number of sectors, could find themselves facing challenges on multiple fronts.

Mr Howie’s interests include estate agents Pacitti Jones, cubicle designer and manufacturer Thrislington, shipping service firm Calport and property business Rossco Properties.

Group turnover now exceeds £50m and has a headcount of over 450 people.

Another business interest is Shore Laminates, which supplies a range of flooring.  Mr Howie said his laminate flooring business was performing well, but was also facing price increases as a result of importing from Brazil and the far-east.

“It is dollar deals, so there is pressure on that,” he said. “But we’ve got export deals where we’ve priced when the dollar was $1.50 so that comes back in our favour. You can’t have it all ways.”