Superstore groups prepare to stomach higher prices because of far east demand and biofuel incentives
Supermarket pledges to drive down the price of staple goods and help cash-strapped shoppers looked increasingly vulnerable last night after Britain's biggest food manufacturer insisted even the largest superstore groups would have to stomach higher prices from suppliers that are struggling with steep rises in ingredient costs.
Premier Foods, the group behind Branston Pickle, Oxo, Mr Kipling and Quorn, said a "systemic change" in world ingredient markets, with "violent rises" in many commodities, had heralded a new era, bringing to a close almost 15 years of relatively stable, low inflation.Finance director Paul Thomas predicted general food ingredient inflation could reach "somewhere as high as 4% to 5%" next year.
Chief executive Robert Schofield said: "Over the past 30 years the cost of food as a proportion of disposable income has come down from 30% to less than 10%. It is going to edge back up ... I think we've got two or three years of inflation at the very least."...MORE