Gary Sharkey, head of wheat procurement for Hovis, told British Baker: “Bakers cannot possibly absorb the latest round of increases.
Flour costs have risen yet again, due to world shortages, and there have been big increases in energy costs, a major factor in baking, plus significant rises in oil prices affecting daily distribution costs.”
He said that, last September, wheat prices had risen 60% year-on-year due to adverse weather conditions and high demand. Since September, prices have continued to rise and are now £50 a tonne higher.
Niall Irwin, of Irwins plant bakery in Northern Ireland and president of the Irish Association of Master Bakers, said; “We are not immune. We cannot absorb recent steep increases and will have to pass costs on shortly. We supply Irish and mainland supermarkets throughout the UK. It’s not just fuel and flour costs that have risen, but edible oils and fats used in baked goods. Dried fruit, too, is continually rising.
“Everyone is hopeful the next harvest will be good quality and plentiful, but if not, it will be a continuous spiral of price rises.”
Warburtons’ CR director Sarah Miskell said: “We are aware of continued input costs such as wheat and energy. For now we are monitoring the market really closely. In these volatile market conditions, it is always difficult to predict the full extent of the long-term price peaks. Price rises may be needed, but Warburtons feels it is too early to do this at the moment and will continue to watch the markets.
Mike Holling of 52-shop Birds of Derby, who is also chairman of the National Association of Master Bakers, representing high street independents, said: “We are experiencing increases every week in ingredients, while fuel and energy have risen considerably. We had to raise bread prices last week.
“A few days ago, I met with several members of the National Association. Some have already raised prices and others are intending to very shortly, just to keep their businesses viable.”
Jefta kon Lakovic, chief executive of Arnouti Pitta Bakery, which supplies supermarkets, said: “As well as all the increases, commodity price speculators have changed their speculation to the most important commodities of the world – food.”