The falling value of the pound meant the Mr Kipling and Bisto gravy maker wanted to negotiate price rises of “around the mid-single digit mark”. Each brand would receive different price rises, Premier Foods said.
Price rises could not be avoided when all other avenues – including adjusting efficiency and promotions – had been exhausted, the company claimed.
A Premier Foods spokeswoman said: “We take a blended approach to managing cost increases driven by currency and commodity factors.
‘The mid-single digit mark’
“The situation on pricing differs between our different categories and brands, and is currently under discussion with our individual retail customers. However, on average we are considering rises around the mid-single digit mark.”
Premier Foods is the latest in a series of food manufacturers that have attempted to lift prices or cut costs in response to the falling value of sterling, caused by the Brexit vote.
In October, Unilever found itself in a very public row with Tesco after it raised prices on Marmite and PG Tips by about 10%. The price hike sparked a union backlash, claiming food manufacturing workers and shoppers shouldn’t become “collateral damage” victims of the government’s Brexit handling.
In November, Mondelēz International suffered a social media backlash after changing the iconic shape of its Toblerone bar to offset rising costs. The chocolate bar’s weight would be reduced too – 400g bars would become 360g, and 170g bars would become 150g.
Crisp maker Walkers and fish fingers maker Birds Eye also raised prices in November by 10% and 12% respectively. They both blamed the weak pound on the price increases.
‘Collateral damage’
Meanwhile, supermarket festive prices rose for the first time in two years this year, according to Kantar Worldpanel. Grocery inflation stood at 0.2% for the 12 weeks to January 1.
Retailers Morrisons, Lidl and Sainsbury reported record sales over the festive period, at the same time.
Kantar Worldpanel head of retail and consumer insight Fraser McKevitt said: “The long-anticipated return to inflation suggests that the speed of growth in the overall market will continue to hasten in 2017.
“Both consumers and retailers will be looking at ways to avoid increasing the cost of the weekly shop.”
Premier Foods proposed price rises – at a glance
- In talks with retailers over price rises
- Could hike prices by about 5%
- Each brand would have a different price rise