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.
These include higher prices for wheat and labour costs, as well as absences of Covid-related staff.
Leading manufacturer McVitie’s has warned customers to brace themselves for price hikes across their range, which includes Penguins, Jaffa Cakes and the best-selling chocolate digestives
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 some point, just like many others, the higher prices will result.” 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.’
Murray stated that his company was in talks with supermarkets about price hikes and refused to give specifics.
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.
McVitie’s Hobnobs will also be affected by the price hikes caused by increased costs of ingredients such as wheat, higher labour costs and Covid-related staff absences
Pladis, said he was forced to share the increases to customers because Pladis couldn’t help but feel this way. ‘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.’
In response to the Government’s drive to lower obesity, he said that all profits would be reinvested into research and development.
McVitie’s chocolate digestives are Britain’s favourite snack, research has found, and the UK biscuit market is worth £3.2 billion 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.