Electrolux jolted into action by rising costs

15 June 2011

15 June 2011 | Lindsay Clark

White goods manufacturer Electrolux plans to increase wholesale prices to retailers in Europe by between 5 and 7 per cent to offset increases in raw material and transport costs.

The firm said in a statement that over the past 18 months, the average prices for some of its most important raw materials have increased by between 40 and 90 per cent, while the cost of moving goods had also gone up significantly.

Although unable to specify which raw materials contributed the most to rises, a company spokesman said plastics, steel and oil were the firm’s critical inputs.

“The trend is now stabilising, but there are no signs of a broad-based major downward correction towards the prior cost levels. During the same period of time, Electrolux has experienced increased price pressure in the market, which accelerated in the first part of 2011,” the firm said in a statement. The price rises form “part of the work to achieve sustainable profitability”.

The fridge and washing machine maker told its European customers that for appliances, an increase of between 5 and 7 per cent would be effective as of 1 October 2011. The manufacturer was still in discussion with retailers over the price rises, the spokesman added.

Last week, the Office forNational Statistics published data showing that manufacturer input prices increased by 15.7 per cent in the year to May 2011. Oil alone increase by 37 per cent during the same period.

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