Premier Foods to raise prices to tackle rising input cost

Premier Foods, the maker of Mr Kipling cakes and OXO cubes, today (18) said that it will raise prices of its products as part of plans to tackle rising input cost inflation, after reporting an annual profit that surpassed its forecast.

The group, which also hiked dividends by 20 percent after its Mr Kipling brand enjoyed its best year ever, said it was gaining market share as consumers seek good value-meal solutions amid Britain’s cost-of-living crisis.

The company, which also owns brands like Bisto and Ambrosia, and distributes Nissin’s Cup Noodle and Cadbury cakes, reported headline trading profit of 148.3 million pounds ($184.56 million) for the year ended April 2, above its forecast of at least 145 million pounds.

Overall, the grocery sector’s outlook has been weighed by the costs-of-living crisis in Britain and supply disruptions from the war in Ukraine.

Although Premier Foods does not have any direct exposure to Russia or Ukraine, it said it would be affected by rising prices of commodities such as wheat and dairy, as well as surging energy prices and the slowing UK economy.

The news comes as Britons are dealing with 40-year-high inflation rates.

Consumer price inflation hit 9 per cent in April, the Office for National Statistics said on Wednesday (18), surpassing the peaks of the early 1990s recession that many Britons remember for sky-high interest rates and widespread mortgage defaults.

Food prices rose by 6.7 per cent in the 12 months to April, the ONS said.

Helen Dickinson, chief executive of the British Retail Consortium, commented on the inflation rates by acknowledging that “higher energy prices, along with a tight labour market, and the huge costs of moving goods around, are impacting all retailers”. 

“Food production has been particularly hard hit, with historically high global food prices, rising costs of animal feed, and disruption in supplies as a result of the Ukraine war,” she said.