Let them eat (more expensive) cake


Mr Kipling cakes may be known for the slogan “exceedingly good,” but it seems they could be about to become exceedingly expensive too.
Premier Foods, which makes Mr Kipling and Cadbury cakes, says the soaring costs of ingredients means it will have to raise prices to the consumer.
The company also owns a raft of household favourite brands, including Ambrosia, Angel Delight, Homepride, Sharwood’s, Lloyd Grossman sauces, Oxo, Bisto and Batchelors. A whole range of goods families are used to having in their store cupboard could, therefore, become more expensive.
Gavin Darby, CEO of the Hertfordshire-headquartered firm, said Premier was already in discussions with well-known retailers about raising prices in certain categories.The price of cake is expected to be hit hardest because butter prices have gone up by 80 per cent, while wheat and edible oils have seen cost increases of 40 per cent. Sugar, meanwhile, is between 20 and 30 per cent more expensive.
The rises are as a result of commodity price increases and pressures on sterling.
Mr Darby said: “That affects cake more than grocery products. We will have to look at it category by category. A number of retailers have referred to justifiable and unjustifiable approaches from their suppliers. We feel by being very category focused, we will be much more justified.”
The firm, which was founded in 1975, is now considering a number of ways to offset cost pressures, including making pack sizes smaller, and introducing efficiency measures within its manufacturing and distribution systems.
It is also engaging in discussions with its own suppliers to try to reach a better deal, and is likely to reduce the number of product promotions.
Premier corporate affairs director Richard Johnson said that there would probably be price rises during 2017. However, he added: “We are very much in the camp of limited increases”.
He added that the firm would only increase the cost to the consumer by passing on price rises as a “last resort”.
Premier has just announced that underlying profits fell by four per cent to £26.3 million in the half year up until the beginning of October.
The food firm said that its sales and profits were lower than predicted in the last three months of that period. It said that unseasonably warm weather during the month of September meant customers were not buying gravy or desserts in large numbers.


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