Retail prices for pigmeat products are poised to go up from this weekend to reflect rising market values.
Pork leg prices are expected to increase by at least 10p/kg in supermarkets from Sunday, while bacon prices are set to rise by 44p/kg a week later.
Pigmeat processors have forced through the hikes by persuading their supermarket customers that soaring raw material costs in the UK and Europe are placing unsustainable pressure on their margins.
Neil Hammond, MD of Grampian Country Food Group’s pork business, said the price of both domestically produced and imported raw material was rising. “British pigmeat prices are
edging up, as are those for product imported from Denmark and Holland. We have very little stock, which means we are forced to buy on the markets at these higher prices.”
The only solution, said Hammond, was for retail prices to rise to offset the extra burden. “We are a high-volume business operating on small margins, and these increases must be passed on to consumers.”
He claimed that consumers would not baulk at paying extra for pigmeat products. This was despite the fact that the rises would add around 11p to the price of a standard pack of bacon, which currently retails at an average of £1.41 in the big four multiples, according to The Grocer 33 data.
“We haven’t had any inflationary cost increases for a few years, and I think the market will bear it,” he added.
However, Grampian has yet to persuade retailers that a price rise of 6% across all meats is required to offset big increases in the cost of utilities, fuel and packaging.
Hammond said retailers were making “encouraging noises”, but discussions between buyers and the Grampian sales team were ongoing.
Richard Clarke