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10 October 2012 | Adam Leach
UK food producer Cranswick is in discussions with corporate customers about increasing the sale price of pork.
In its trading statement for the first half of 2012, the company - a supplier to supermarkets such as Waitrose and Sainsbury's - warned that to secure its own supplies, it aims to increase its selling price. Cranswick predicted prices for the meat, already at a three-year high, will increase further as a result of both drift reductions and an increase in farming costs, the result of EU welfare regulations.
The company statement said: “This is an issue affecting the whole supply chain and the scale of the inflation, and the need to ensure continuity of supply will necessitate discussions on price increases with the group’s customers; these are underway.”
Despite the increased pressure on its margins, the company reported that underlying turnover had increased by 5 per cent with sales up 6 per cent, largely due to pork performance. It attributed the growth to pork meat being both cheaper than competing meats, such as chicken and beef, and also more versatile.
In July, a report by the Centre for Research on Socio-Cultural Change at the University of Manchester, said the pig supply chain was in crisis. It argued a “trader mentality” from supermarkets drove quick returns for shareholders and kept prices low for consumers, but discouraged long-term investment lower down the chain.