Flour cost rises of over 25% will result in a 10% increase in bread prices in the Republic of Ireland (approximately 10-17 cents loaf), according to the Irish Bread Bakers Association (IBBA), which represents the major plant bakeries in Ireland.
Grain and flour prices have increased by E20-30 per tonne and gas by 30% as have other costs, says IBBA.
Paul Kelly, director of Food and Drink Industry Ireland (the parent body of IBBA) told British Baker: "Our input costs have gone up significantly. The intensely competitive nature of the marketplace has caused a number of big bakeries to either rationalise or close during the last two years, such as Nevilles in Macroom, Irish Pride in Kanturk and Old Mill in Dublin with the loss of a couple of hundred jobs."
He added: "It is simply not possible to absorb such a huge increase in raw material costs. It is not sustainable and hopefully retailers will adopt a realistic attitude to this issue."
But the Irish Farmers Association (IFA) argues that there is no justification for the price rise. It said that a 25% rise in wheat prices should translate into an increase of 2.3 cents per loaf and that the average price of a standard white loaf has risen by 11% from E1 in 2001 to E1.11 by November 2006.
While refusing to comment on what farmers are paid for wheat, IBBA disputes IFA’s assertion that a 10% price increase is not justified.
Currently, bread prices in Ireland range from E1-1.70 for branded products and own label E0.50-1.00.