Increase in fuel prices hits the baking industry

17 January, 2011

The ever-increasing price of fuel is hitting bakery firms hard as they continue to contend with higher commodity prices.

A 0.76 pence per litre (ppl) increase in fuel tax was added on 1 January, which coincided with the 2.5% increase in VAT. According to petrolprices.com, the average price of diesel on 10 January 2011 was 134.24ppl, but in some places it reached as much as 144.9ppl. Unleaded stood at 127.88ppl on average.

Gloucester-based Janes Pantry has a fleet of nine Jiffy vans, which deliver to offices and factories in Gloucester and the surrounding area. MD Neville Morse, said the latest fuel price rise will have a noticeable effect. "We have put the prices of the goods sold in vans up 10% to cover the extra VAT, fuel duty and general increase in fuel costs," he explained. "The price is just galloping away, and I can see it hitting the 1.50 per litre mark."

Philip Hartley, director at Shipley-based wholesale bakery Hughes Family Bakers, said the price has gone up around 30% in the past year, with the diesel bill for his fleet of 11 delivery vans up from 8,000 to around 10,000 per month currently. The firm delivers to the likes of Spar, Nisa and The Co-operative with fresh bread, cream cakes and confectionery. He said short of grouping more deliveries together, which would mean some of its customers wouldn't get their bread at its freshest, there's not much the business can do to cut fuel costs.

The Freight Transport Association has condemned the latest increase on fuel duty. It is the third rise since April 2010 "and will push diesel prices to within 4ppl of the all-time highs reached in July 2008 when oil prices were at $145 per barrel", it said.





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