Oh crumbs! McVitie’s chief warns that biscuit price rises are about to bite us
BISCUIT lovers are about to experience a new credit crunch – with prices of the teatime snack set to soar.
Leading manufacturer McVitie’s has warned customers to brace themselves for price hikes across their range, which includes Jaffa Cakes, Penguins, Hobnobs and the best-selling chocolate digestives.
Parent company Pladis Global, which also makes Jacob’s and Carr’s crackers and the Go Ahead range fruit bars has warned that a combination of problems means rises are inevitable.
They include increased prices for ingredients such as wheat, higher labour costs and Covid-related staff absences.
Pladis UK managing director David Murray said: ‘Omicron disruption, absenteeism, and the rising cost of business going forward present a big challenge for us. At the end of the day, like in many other categories, it will flow through to higher prices. I’ve never seen a combination of challenges like this at the same time.
‘We’ve dealt with substantial challenges in the past in the food industry – whether it’s natural disasters, inflation in the economic crisis. It’s the compression of the challenge, combined with the scale of some of them.
‘We’re kind of getting some sleepless nights. It’s really just testing our resilience.’
Mr Murray said his company is in negotiations with the supermarkets it supplies about the level of the price increases and he refused to say how much each product would rise. Asked whether it would be around the same as the inflation rate – 5.1 per cent in November – he said: ‘You’re absolutely at numbers like that.’ A five per cent rise in a box of McVitie’s Victoria classic biscuit collection would raise the cost from £4 to £4.20.
The company is seeing ‘double digit’ percentage cost rises on raw ingredients, such as cocoa beans, Mr Murray added.
He said Pladis had been left with no choice but to pass on the rises to customers. ‘There’s a constant drumbeat of opportunity to reduce cost, but when it is at this scale of inflation, I think we’re going to struggle,’ he said.
‘But the humble chocolate digestive will still be very affordable.’
He added that profits were being reinvested in research and development, including into healthier savoury snacks amid a Government drive to reduce obesity.
McVitie’s chocolate digestives are Britain’s favourite snack, research has found, and the UK biscuit market is worth £3.2billion a year
Pladis is also planning to launch a new product, a chocolate and caramel cup-shaped biscuit called Blissfuls, in Sainsbury’s in January.