Premier hit by 'higher' price rises
16 November, 2007
RHM owner Premier Foods claimed this week that its British Bakeries division had been the most efficient of the big plant bakers in putting up its bread prices to cover rising costs, but that its comparatively higher prices had hit sales volumes.
In a trading update, the company said it had made a further price increase in the last week in October to mitigate the impact of unprecedented increases in wheat costs seen during the summer. But it had only recently started to see similar increases in the retail price of other bread brands. It said: "Consequently, we have seen lower volumes and, combined with the impact of the higher wheat prices, trading profit for the division has been significantly lower during September and October than the same period last year."The company said it expected bread volumes would continue to be affected while a disparity in retail prices between the main bread brands remained.Meanwhile, the company added it was "delighted" by progress on the integration of RHM, acquired at the start of the year. It rationalised its Bradford bakery and Telford bakery distribution depot in October.It has also sold the RHM frozen frozen desserts business to Country Style Foods and the pastry business to Green Isle Foods. Premier has also exited its cake van sales operation. Sales for the cakes business for the four months to October were approximately 3% ahead of the same period in 2006.