09 July 2007 | Paul Snell
Premier Foods is to increase the price of bread to compensate for rising wheat costs.
Updating investors on its performance in the first half of the year, the food producer said profits in the spring had been affected by wheat prices, as well as promotions run by its competitors. "We will need to recover the further increases in wheat prices we have seen since February through pricing in the coming weeks," it said.
However, the company remained confident it would meet financial expectations when it announces its interim results in September.
It also expects to make £113 million cost savings from the integration of fellow food manufacturers RHM and Campbell's. It anticipates saving £85 million from merging with RHM and a further £28 million from the acquisition of Campbell's.
The group also confirmed its new procurement structure exclusively revealed in SM (News, 5 July 2007). The firm intends to increase staff in its procurement function by 25 per cent.