Bakers are facing a sharp increase in the price of ingredients and equipment imported from the Continent, as the slump in the value of the pound bites.
Since November, the value of sterling against the euro has fallen from £1.25 to close to parity - a 20% drop - forcing importers to start upping prices. One importer of olive oil, olives and sun-dried tomatoes, used in speciality breads, told British Baker that it would institute a 10-15% price rise in January.
Tom Molnar, co-MD of Hendon-based bakery the Bread Factory, is expecting a cost rise in ingredients from Europe of between 5-20% in the coming months. "[The weak pound] is having a significant effect. We are looking to source more ingredients, such as flour and butter, from British suppliers."
He added that the price of equipment from Europe had already rocketed. "We were planning to buy a new mixer in November, but a month later it had gone up 20%. Instead, we bought a refurbished machine in the UK."
At French flour company Moul-Bie, director Michel Nguyen said importers were under "big pressure". "We are not putting prices up for the time being, but whether this is sustainable we don’t know. There has been a 30-40% fall in the pound [in the past two years] and it’s difficult to absorb that long term." A fall in raw material prices thanks to a bumper European harvest has helped offset the currency situation, he added.
London wholesaler and retailer Exeter Street Bakery said its packaging, which is sourced from Europe, increased in price by 15-20% last month.