ll the warning signs are there. Wheat prices in London and Paris have leapt by a third in just a month, and Hovis baker Premier Foods has warned that the “sheer magnitude” of wheat price increases means it will have to pass commodity cost hikes on to consumers.
But the big bread price hike in the mults hasn’t quite happened yet. Indeed, bread prices have bucked inflation and stayed flat for the past 12 months. The average price for a bakery product across the major multiples rose by just a penny from £1.14 to £1.15 in the 12 months to 15 August. Prices rose at the beginning of the year but have dropped to the same position they were a year ago in the past month [BrandView.co.uk]
Wholesale prices 18 August 2012: meat
Pig prices in many European countries have been moving up recently, as concerns about new EU welfare legislation have increased. The partial sow stall ban - in effect from 1 January 2013 - is expected to lead to a reduction in European pigmeat supplies of as much as 10% as producers unable or unwilling to comply leave the industry.
UK pork wholesale prices are up 0.3% month-on-month but down 1.3% year-on-year, while Danish pork prices have fallen 0.5% over the past month and risen 2.6% over the past 12 months. However, prices are expected to rise more as the ban moves closer. Producers also face much higher costs, driven by higher grain prices.
UK beef prices are up sharply year-on-year, driven by a shrinking British herd and strong global demand. At £3,020/t, prices are up 23.8% year-on-year, having risen by a further 4.9% in the past month. French beef prices have increased 9% over the past year and 1% in the past month.
Allied Bakeries played an important role in holding category inflation down. Its aggressive pricing saw the average price of its products fall by 6.4%when taking promotions into account. A loaf of Allinson bread fell from £1.12 to £1.07 and Burgen from £1.31 to £1.15. And at 98p, the average Kingsmill product is 7p cheaper than a year ago, though this is in part down to the listing of more half loaves, while Sunblest products fell by 2% to £1.01. The average price of Patak’s naan bread, also made by Allied Bakeries, fell by 31% after Asda listed two lines at a round-pound price, undercutting Tesco and Waitrose.
By contrast, the average price of a Hovis product now stands at £1.13, compared with £1.06 a year ago, while a Warburtons product is 6p more and costs £1.17. Hovis’s average price is brought up partly by the introduction of more premium lines, such as its £1.65 homebake granary bloomer.
Gluten-free loaves, which by definition are not directly affected by changes in wheat prices, also kept prices steady or deflationary. The average Livwell product dropped from £2.26 to £2.08 and the average unit price of free-from cakes brand Lovemore was 87p cheaper than 12 months ago.
Soreen has gone up in price the most this year, with the average unit price jumping 18% to £1.03. The malt loaf was perhaps hit by a commodity double-whammy - raisin prices are unusually high as a result of increasing competition for land and rising demand for grapes for wine and grape juice concentrate. Prices in the US, which supplies 45% of UK imports, are up 7.5% year-on-year, to £1,733/tonne [Mintec 52 w/e 1 August].