Rise in energy costs set to push up bread prices
27 January, 2006
Bread prices look set to rise as bakers are hit by an increase in the price of gas, widely used to power ovens.
This month, gas costs 92p a therm on the forward market for the first quarter of 2007, compared to 65p in November 2005. The MD of one industrial bakery said he has been forced to look at raising prices. “Fuel is costing us an extra £24,000 a week, and all our suppliers are putting their prices up,” he said. “Gas and electricity prices have moved, as has diesel.”Rathbone Kear chief executive Harry Kear called gas prices “a major problem”, suggesting a penny increase on loaves was needed. “We are trading strongly and it should be even better, but the rising price of gas has hit us,” he said. “It has more than doubled in the last five months; it is costing us an extra £15,000-£20,000 a week for gas and electricity at our three bakeries.”Frank Roberts chairman David Roberts said: “There was a 100% increase in October on our previous contract. It is one of the major cost inputs of bread and must be reflected in the price. Recovery of costs of this nature is difficult.”Specialist bakery Nicholas & Harris, based in Salisbury, is considering price rises. Dave Brooks, CEO of parent Finsbury Food Group said: “From November to December prices doubled. Our suppliers are also suffering, putting pressure on the whole supply chain. We are discussing opportunities for price increases where we can.” Allied Bakeries is putting up prices with the relaunch of its Kingsmill brand’s 800g range this month. Tesco and Asda told British Baker they do not discuss ongoing negotiations on price.- The Department of Trade and Industry has started a 12-week consultation on energy, inviting responses to its document ‘Our Energy Challenge’.