Premier Foods issues warning on food prices

4 September 2007
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05 September 2007 | Antony Barton

The UK's largest food producer says the days of increasingly cheap food may soon be over, as increased demand for biofuels puts a strain on grain production.

Robert Schofield, chief executive of Premier Foods, said there has been a trend over the past 10 to 20 years in which food has become "irrevocably cheaper".

He added: "We're now in a period of food inflation not seen since the early 1990s and it's not going to go away."

The company is raising the price of bread this week to reflect the growing cost of wheat, with further increases possible. A Premier spokesman declined to reveal details of the price rise and said that retailers may choose to absorb the extra cost rather than pass it on to customers.

Premier's interim results showed post-tax profit of £21.9 million for the six months to 30 June, up from £20.5 million the previous year.

The company says the integration of Campbell's UK and Irish businesses, completed in 2006, is on track to provide annual cost savings of £28 million. The takeover of RHM is still set to achieve eventual annual savings of £85 million.



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