Top UK bakery Allied Bakeries has warned it could increase bread prices after an indepth review of production and delivery costs. "We're not talking about price hikes across the board," said commercial director Eric Place. "We're simply looking at each individual customer in turn and asking, How profitable are you for us'?" Place said bakers had to fight back to restore the industry to profitability after years of price cutting from the multiples had left bread prices at "unsustainably low" levels. "Bread has been used as a loss leader for too long. Because consumers have become accustomed to such ridiculous prices for an 800g loaf of bread, they also expect low prices on added value products. "Even quality products above the basic loaf are anchored too low." Allied recently closed plants in Aberdeen, Ipswich and Coleraine in Northern Ireland as part of a rationalisation programme designed to trim costs and streamline the business. But improved efficiency and new product development would only go some way to tackle the problems facing the industry, said Place. The first priority had to be to achieve a more realistic price for a loaf of bread. The situation in Northern Ireland is even worse because of the different economies of scale and higher operational and distribution costs. In the meantime, Allied is focusing on value added areas such as organic bread, bakery snacks and meal accompaniments such as tear and share' products, which offer higher profit margins. A subsidiary of AB Foods, Allied is best known for its Kingsmill, Allinson and Sunblest brands. {{NEWS }}