ADM Milling has announced a flour price increase of £18.20 per tonne. The rise will be effective from 1 September, 2008.

Ian Pinner, ADM managing director, told British Baker that the increase was an essential requirement to address the significant rise in costs that had occurred since September 2005, when ADM Milling last sought to recover an element of increased operating costs.

He said: "Over the past three years, our business has been faced with ever-increasing operating costs, particularly diesel fuel and electricity, as well as other general operating costs. The efficiency improvement programmes we have implemented have provided some shelter from these costs over the years, but we cannot continue to absorb them into our business.

"The price of mineral oil alone has increased dramatically from $60 a barrel since July 2005 to the current price of $145. Subsequently, diesel fuel prices have increased some 50%, which considerably affects the cost of our deliveries."

He continued: "In addition to diesel fuel increases the cost of electricity over the same time has increased by a staggering 240%, with forward prices forecast to be higher still, which has had a dramatic effect on the conversion costs of flour manufacturing."

Pinner said that ADM Milling, with nine mills across the UK, would continue with efficiency improvements "to provide its customers with the highest levels of quality and service". The increase translates to around 29p on a 16kg sack of flour.

Two weeks ago, Alex Waugh, director general of the National Association of British and Irish Millers, said that steeply rising energy prices and other costs had impacted seriously on the grain and milling industries.


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