Guest guest Posted September 7, 2007 Report Share Posted September 7, 2007 Days of cheap food are over, say suppliers as ingredient costs soar Superstore groups prepare to stomach higher prices because of far east demand and biofuel incentives Simon Bowers Wednesday September 5, 2007 The Guardian 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. Article continues -- -- 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. " Of central concern to Premier, which acquired Hovis bread maker RHM earlier this year, has been a doubling in the price of wheat. The group pushed through price rises across its bread and flour range earlier this month and yesterday warned that more price rises were being planned unless wheat prices retreated. Every £10 rise on the price of a tonne of wheat costs Premier £8m a year. Yesterday Tesco added 8p to the price of an 800g Hovis loaf and analysts predicted a further rise of 5p to 6p. Six weeks ago family-owned competitor Warburtons filed figures with Companies House showing a £14m increase in its raw material bill. It saw profits dip despite a 16% rise in sales. Bread is among the basket of staple goods at the centre of the latest price war between the supermarkets, led by Tesco and Asda. In June these two launched price cuts totalling £520m and promised the move represented just the " first salvo " in a longer battle. The supermarkets are focused on attracting shoppers whose disposable income has been hit by five interest rate rises within a year, volatile energy bills and only modest pay rises. Last night Tesco issued an uncharacteristically conciliatory statement. " Where there are genuine cost price pressures in the supply chain we are always open to discussion with suppliers. We will continue to do all we can to keep prices as low as possible for shoppers but when wholesale costs go up some prices in store may follow to reflect that. " The carefully worded comment comes after the Competition Commission, which is coming to the end of an investigation into the dominance of supermarkets, last month ordered Asda and Tesco to hand over millions of emails exchanged with their suppliers. Some suppliers have privately accused supermarkets of bullying them on price. In a robust message to the big retailers, Mr Schofield said: " I have no intention of taking a hit on margin ... Imagine what would happen if you've got 20% or 25% inflationary pressure on your business and you don't put your prices up. These are numbers that put you out of business if you don't do that. " At the same time Premier said it was looking at cutting costs on bread. This is expected to include bakery closures and a review of distribution. Mr Schofield said it should not cost more to deliver bread than it does to make it, suggesting a collaborative solution with leading competitors Warburtons and Associated British Foods, makers of Kingsmill. " Currently you have three vans delivering to each store within an hour of each other each day. That's highly inefficient. " Speaking after Premier announced half-year underlying operating profit at its bread business had halved to £19m, he also pledged to raise marketing spending behind Hovis, bringing it in line with other leading Premier brands and responding to competitor campaigns. Premier said demand from India and China and incentives for farmers to grow biofuels had increased wheat and other commodity prices. The company said the recent abnormal weather patters and impact of global warming was not, as yet, a discernible factor. " There have been poor harvests - but we've had poor harvests before and you'd have to get an awful lot of them before you could say something has fundamentally changed, " Mr Schofield said. Demand from the far east and the trend toward biofuels were driving up carbohydrates around the world. " We can't see, from where we are sitting, that these sorts of pressure are going to go away, so this is not a blip ... If you're buying pasta in Italy it has gone up 25%; if you're buying tortillas in Mexico it's gone up; if you're buying bread in the UK and Europe it has gone up. " There was a knock-on impact on livestock, milk and glucose prices, he added. In recent weeks the National Farmers' Union and the National Pig Association have accused supermarkets of pursuing unrealistic prices on meat in the face of soaring feed costs. Last month Asda launched its £2 chicken - a measure described by NFU president Peter Kendall as " clearly unsustainable and [sending] completely the wrong message. " Other recent ingredient price rises include a jump in cocoa, palm oil and milk. Firms to have been hit include Northern Foods, Greggs and Cadbury Schweppes. I never thought about the universe, it made me feel small Never thought about the problems of this planet at all Global warming, radio-active sites Imperialistic wrongs and animal rights! No! Why think of all the bad things when life is so good? Why help with an 'am' when there's always a 'could'? Let the whales worry about the poisons in the sea Outside of California, it's foreign policy I don't want changes, I have no reactions Your dilemmas are my distractions I never looked around, never second-guessed Then I read some Howard Zinn now I'm always depressed And now I can't sleep from years of apathy All because I read a little Noam Chomsky I'm eating vegetation, 'cause of Fast Food Nation I'm wearing uncomfortable shoes 'cause of globalization I'm watching Michael Moore expose the awful truth I'm listening to Public Enemy and Reagan Youth I see no world peace 'cause of zealous armed forces I eat no breath-mints 'cause they're from de-hoofed horses Quote Link to comment Share on other sites More sharing options...
Guest guest Posted September 7, 2007 Report Share Posted September 7, 2007 I'm not sure why the trend towards biofuels would drive prices up? Aren't they supposed to be less expensive? , fraggle <EBbrewpunx wrote: > > Days of cheap food are over, say suppliers as ingredient costs soar > > > Superstore groups prepare to stomach higher prices because of far east > demand and biofuel incentives > > Simon Bowers > Wednesday September 5, 2007 > The Guardian > > > 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. > > > Article continues > > -- ------------ > > -- ------------ > > 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. " > > Of central concern to Premier, which acquired Hovis bread maker RHM > earlier this year, has been a doubling in the price of wheat. The > group pushed through price rises across its bread and flour range > earlier this month and yesterday warned that more price rises were > being planned unless wheat prices retreated. Every £10 rise on the > price of a tonne of wheat costs Premier £8m a year. > > Yesterday Tesco added 8p to the price of an 800g Hovis loaf and > analysts predicted a further rise of 5p to 6p. > > Six weeks ago family-owned competitor Warburtons filed figures with > Companies House showing a £14m increase in its raw material bill. It > saw profits dip despite a 16% rise in sales. > > Bread is among the basket of staple goods at the centre of the latest > price war between the supermarkets, led by Tesco and Asda. In June > these two launched price cuts totalling £520m and promised the move > represented just the " first salvo " in a longer battle. The > supermarkets are focused on attracting shoppers whose disposable > income has been hit by five interest rate rises within a year, > volatile energy bills and only modest pay rises. > > Last night Tesco issued an uncharacteristically conciliatory > statement. " Where there are genuine cost price pressures in the supply > chain we are always open to discussion with suppliers. We will > continue to do all we can to keep prices as low as possible for > shoppers but when wholesale costs go up some prices in store may > follow to reflect that. " > > The carefully worded comment comes after the Competition Commission, > which is coming to the end of an investigation into the dominance of > supermarkets, last month ordered Asda and Tesco to hand over millions > of emails exchanged with their suppliers. Some suppliers have > privately accused supermarkets of bullying them on price. > > In a robust message to the big retailers, Mr Schofield said: " I have > no intention of taking a hit on margin ... Imagine what would happen > if you've got 20% or 25% inflationary pressure on your business and > you don't put your prices up. These are numbers that put you out of > business if you don't do that. " > > At the same time Premier said it was looking at cutting costs on > bread. This is expected to include bakery closures and a review of > distribution. Mr Schofield said it should not cost more to deliver > bread than it does to make it, suggesting a collaborative solution > with leading competitors Warburtons and Associated British Foods, > makers of Kingsmill. " Currently you have three vans delivering to each > store within an hour of each other each day. That's highly > inefficient. " > > Speaking after Premier announced half-year underlying operating profit > at its bread business had halved to £19m, he also pledged to raise > marketing spending behind Hovis, bringing it in line with other > leading Premier brands and responding to competitor campaigns. Premier > said demand from India and China and incentives for farmers to grow > biofuels had increased wheat and other commodity prices. > > The company said the recent abnormal weather patters and impact of > global warming was not, as yet, a discernible factor. " There have been > poor harvests - but we've had poor harvests before and you'd have to > get an awful lot of them before you could say something has > fundamentally changed, " Mr Schofield said. > > Demand from the far east and the trend toward biofuels were driving up > carbohydrates around the world. " We can't see, from where we are > sitting, that these sorts of pressure are going to go away, so this is > not a blip ... If you're buying pasta in Italy it has gone up 25%; if > you're buying tortillas in Mexico it's gone up; if you're buying bread > in the UK and Europe it has gone up. " There was a knock-on impact on > livestock, milk and glucose prices, he added. > > In recent weeks the National Farmers' Union and the National Pig > Association have accused supermarkets of pursuing unrealistic prices > on meat in the face of soaring feed costs. Last month Asda launched > its £2 chicken - a measure described by NFU president Peter Kendall as > " clearly unsustainable and [sending] completely the wrong message. " > > Other recent ingredient price rises include a jump in cocoa, palm oil > and milk. Firms to have been hit include Northern Foods, Greggs and > Cadbury Schweppes. > > > I never thought about the universe, it made me feel small > Never thought about the problems of this planet at all > Global warming, radio-active sites > Imperialistic wrongs and animal rights! No! > Why think of all the bad things when life is so good? > Why help with an 'am' when there's always a 'could'? > Let the whales worry about the poisons in the sea > Outside of California, it's foreign policy > I don't want changes, I have no reactions > Your dilemmas are my distractions > I never looked around, never second-guessed > Then I read some Howard Zinn now I'm always depressed > And now I can't sleep from years of apathy > All because I read a little Noam Chomsky > I'm eating vegetation, 'cause of Fast Food Nation > I'm wearing uncomfortable shoes 'cause of globalization > I'm watching Michael Moore expose the awful truth > I'm listening to Public Enemy and Reagan Youth > I see no world peace 'cause of zealous armed forces > I eat no breath-mints 'cause they're from de-hoofed horses > Quote Link to comment Share on other sites More sharing options...
Guest guest Posted September 7, 2007 Report Share Posted September 7, 2007 biofuels like ethanol additives come from grains so..instead of grains going toward food production, you are now driving on them hence..less grain to go around for food production biofuels are a disaster actually imo tofuchick24 Sep 7, 2007 1:28 PM Re: Days of cheap food are over I'm not sure why the trend towards biofuels would drive prices up? Aren't they supposed to be less expensive? , fraggle <EBbrewpunx wrote:>> Days of cheap food are over, say suppliers as ingredient costs soar> > > Superstore groups prepare to stomach higher prices because of far east> demand and biofuel incentives> > Simon Bowers> Wednesday September 5, 2007> The Guardian> > > 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.> > > Article continues> > ----> > ----> > 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."> > Of central concern to Premier, which acquired Hovis bread maker RHM> earlier this year, has been a doubling in the price of wheat. The> group pushed through price rises across its bread and flour range> earlier this month and yesterday warned that more price rises were> being planned unless wheat prices retreated. Every £10 rise on the> price of a tonne of wheat costs Premier £8m a year.> > Yesterday Tesco added 8p to the price of an 800g Hovis loaf and> analysts predicted a further rise of 5p to 6p.> > Six weeks ago family-owned competitor Warburtons filed figures with> Companies House showing a £14m increase in its raw material bill. It> saw profits dip despite a 16% rise in sales.> > Bread is among the basket of staple goods at the centre of the latest> price war between the supermarkets, led by Tesco and Asda. In June> these two launched price cuts totalling £520m and promised the move> represented just the "first salvo" in a longer battle. The> supermarkets are focused on attracting shoppers whose disposable> income has been hit by five interest rate rises within a year,> volatile energy bills and only modest pay rises.> > Last night Tesco issued an uncharacteristically conciliatory> statement. "Where there are genuine cost price pressures in the supply> chain we are always open to discussion with suppliers. We will> continue to do all we can to keep prices as low as possible for> shoppers but when wholesale costs go up some prices in store may> follow to reflect that."> > The carefully worded comment comes after the Competition Commission,> which is coming to the end of an investigation into the dominance of> supermarkets, last month ordered Asda and Tesco to hand over millions> of emails exchanged with their suppliers. Some suppliers have> privately accused supermarkets of bullying them on price.> > In a robust message to the big retailers, Mr Schofield said: "I have> no intention of taking a hit on margin ... Imagine what would happen> if you've got 20% or 25% inflationary pressure on your business and> you don't put your prices up. These are numbers that put you out of> business if you don't do that."> > At the same time Premier said it was looking at cutting costs on> bread. This is expected to include bakery closures and a review of> distribution. Mr Schofield said it should not cost more to deliver> bread than it does to make it, suggesting a collaborative solution> with leading competitors Warburtons and Associated British Foods,> makers of Kingsmill. "Currently you have three vans delivering to each> store within an hour of each other each day. That's highly> inefficient."> > Speaking after Premier announced half-year underlying operating profit> at its bread business had halved to £19m, he also pledged to raise> marketing spending behind Hovis, bringing it in line with other> leading Premier brands and responding to competitor campaigns. Premier> said demand from India and China and incentives for farmers to grow> biofuels had increased wheat and other commodity prices.> > The company said the recent abnormal weather patters and impact of> global warming was not, as yet, a discernible factor. "There have been> poor harvests - but we've had poor harvests before and you'd have to> get an awful lot of them before you could say something has> fundamentally changed," Mr Schofield said.> > Demand from the far east and the trend toward biofuels were driving up> carbohydrates around the world. "We can't see, from where we are> sitting, that these sorts of pressure are going to go away, so this is> not a blip ... If you're buying pasta in Italy it has gone up 25%; if> you're buying tortillas in Mexico it's gone up; if you're buying bread> in the UK and Europe it has gone up." There was a knock-on impact on> livestock, milk and glucose prices, he added.> > In recent weeks the National Farmers' Union and the National Pig> Association have accused supermarkets of pursuing unrealistic prices> on meat in the face of soaring feed costs. Last month Asda launched> its £2 chicken - a measure described by NFU president Peter Kendall as> "clearly unsustainable and [sending] completely the wrong message."> > Other recent ingredient price rises include a jump in cocoa, palm oil> and milk. Firms to have been hit include Northern Foods, Greggs and> Cadbury Schweppes.> > > I never thought about the universe, it made me feel small> Never thought about the problems of this planet at all> Global warming, radio-active sites> Imperialistic wrongs and animal rights! No!> Why think of all the bad things when life is so good?> Why help with an 'am' when there's always a 'could'?> Let the whales worry about the poisons in the sea> Outside of California, it's foreign policy> I don't want changes, I have no reactions> Your dilemmas are my distractions> I never looked around, never second-guessed> Then I read some Howard Zinn now I'm always depressed> And now I can't sleep from years of apathy> All because I read a little Noam Chomsky> I'm eating vegetation, 'cause of Fast Food Nation> I'm wearing uncomfortable shoes 'cause of globalization> I'm watching Michael Moore expose the awful truth> I'm listening to Public Enemy and Reagan Youth> I see no world peace 'cause of zealous armed forces> I eat no breath-mints 'cause they're from de-hoofed horses> I never thought about the universe, it made me feel small Never thought about the problems of this planet at all Global warming, radio-active sites Imperialistic wrongs and animal rights! No! Why think of all the bad things when life is so good? Why help with an 'am' when there's always a 'could'? Let the whales worry about the poisons in the sea Outside of California, it's foreign policy I don't want changes, I have no reactions Your dilemmas are my distractions I never looked around, never second-guessed Then I read some Howard Zinn now I'm always depressed And now I can't sleep from years of apathy All because I read a little Noam Chomsky I'm eating vegetation, 'cause of Fast Food Nation I'm wearing uncomfortable shoes 'cause of globalization I'm watching Michael Moore expose the awful truth I'm listening to Public Enemy and Reagan Youth I see no world peace 'cause of zealous armed forces I eat no breath-mints 'cause they're from de-hoofed horses Quote Link to comment Share on other sites More sharing options...
Guest guest Posted September 7, 2007 Report Share Posted September 7, 2007 Makes sense, hope my denseness isn't on its way back...lol I don't, obviously, know much about them, why do you think they're a disaster? Quote Link to comment Share on other sites More sharing options...
Guest guest Posted September 7, 2007 Report Share Posted September 7, 2007 ok...first off..you'd need to use the entire US corn crop to make enough to fuel the US auto market... then there's the fact of limited payback... think of it this way with every step required to transform a fuel into energy, there is less and less energy yield. For example, to make ethanol from corn grain, which is how all U.S. ethanol is made now, corn is first grown to develop hybrid seeds, which next season are planted, harvested, delivered, stored, and preprocessed to remove dirt. Dry-mill ethanol is milled, liquefied, heated, saccharified, fermented, evaporated, centrifuged, distilled, scrubbed, dried, stored, and transported to customers and, to grow such a crop..you need to dump tons of fertilizer on the earth, which, tada, come from petroleum..its a downward spiral and, then there's the folks who want to use cellulose ethanol..so you'd use the entire plant..great, so now you have LESS soil fertility because you are taking away the entire plant and leaving nothing to rebuild the soil, which means more fertilizers and pesticides, which means more soil erosion, which means faster soil salinity, which means and so on... tofuchick24 Sep 7, 2007 1:59 PM Re: Days of cheap food are over Makes sense, hope my denseness isn't on its way back...lol I don't, obviously, know much about them, why do you think they're a disaster? I never thought about the universe, it made me feel small Never thought about the problems of this planet at all Global warming, radio-active sites Imperialistic wrongs and animal rights! No! Why think of all the bad things when life is so good? Why help with an 'am' when there's always a 'could'? Let the whales worry about the poisons in the sea Outside of California, it's foreign policy I don't want changes, I have no reactions Your dilemmas are my distractions I never looked around, never second-guessed Then I read some Howard Zinn now I'm always depressed And now I can't sleep from years of apathy All because I read a little Noam Chomsky I'm eating vegetation, 'cause of Fast Food Nation I'm wearing uncomfortable shoes 'cause of globalization I'm watching Michael Moore expose the awful truth I'm listening to Public Enemy and Reagan Youth I see no world peace 'cause of zealous armed forces I eat no breath-mints 'cause they're from de-hoofed horses Quote Link to comment Share on other sites More sharing options...
Guest guest Posted September 7, 2007 Report Share Posted September 7, 2007 That process never even came to mind. Maybe it's more of that greenwashing mentioned earlier? They're really pushing biofuel around here as " the " solution. I did read an article a while back that mentioned that in the next few years that Hummer is coming up with the H2O...it will have clear doors that are filled with algae and even when it's at rest it'll put oxygen out into the air. I think it was a hybrid, but one that didn't use gas. I'm definately not informed on cars, but the article made it sound good. Quote Link to comment Share on other sites More sharing options...
Guest guest Posted September 7, 2007 Report Share Posted September 7, 2007 of course they are because it makes big business money. Big Agro companies like ConAgra stand t omake billions and, nuthin changes.... just the way they like it as for the hummer..sounds like a pipedream to me...but..what do i know cheers fraggle tofuchick24 Sep 7, 2007 2:32 PM Re: Days of cheap food are over That process never even came to mind. Maybe it's more of that greenwashing mentioned earlier? They're really pushing biofuel around here as "the" solution. I did read an article a while back that mentioned that in the next few years that Hummer is coming up with the H2O...it will have clear doors that are filled with algae and even when it's at rest it'll put oxygen out into the air. I think it was a hybrid, but one that didn't use gas. I'm definately not informed on cars, but the article made it sound good. I never thought about the universe, it made me feel small Never thought about the problems of this planet at all Global warming, radio-active sites Imperialistic wrongs and animal rights! No! Why think of all the bad things when life is so good? Why help with an 'am' when there's always a 'could'? Let the whales worry about the poisons in the sea Outside of California, it's foreign policy I don't want changes, I have no reactions Your dilemmas are my distractions I never looked around, never second-guessed Then I read some Howard Zinn now I'm always depressed And now I can't sleep from years of apathy All because I read a little Noam Chomsky I'm eating vegetation, 'cause of Fast Food Nation I'm wearing uncomfortable shoes 'cause of globalization I'm watching Michael Moore expose the awful truth I'm listening to Public Enemy and Reagan Youth I see no world peace 'cause of zealous armed forces I eat no breath-mints 'cause they're from de-hoofed horses Quote Link to comment Share on other sites More sharing options...
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