McVitie's, a Scottish biscuit company, owned by UK-based Pladis Global, has reportedly announced that the rates of most of its best-selling products are going to rise. As per the company, brands like Jaffa Cakes, Penguins, and Hobnobs might see a 5% price increase.
David Murray, Pladis UK’s managing director, stated that factors such as omicron disruption, staff absenteeism, more expensive ingredients, as well as greater labor costs, which he claims must carry on to customers, are all key reasons behind the price surge.
Murray further added that at the end of the day, it will all trickle through to greater prices, just as it has in several other segments.
Recently, Pladis, which also makes Jacob's crackers as well as Go Ahead fruit bars, has reported double-digit pricing increases on confectionary products like cocoa beans.
Murray added that the company has faced significant hurdles in the food sector in the past, whether it was natural calamities or inflation during the economic recession. This year, it is the compressed nature of the task, paired with the magnitude of some of those.
Many items, such as building materials and computer chips, are in limited supply, leading to supply shortages and driving up costs throughout a number of business sectors.
In the 12 months leading up to November, the cost of living has increased by 5.1%, rising from 4.2% the month before and reaching its highest level since September 2011.
Food and beverage companies have recently expressed fears that they are experiencing terrifying pricing increases, that could eventually affect the consumers.
Pladis announced in May that one of McVitie's factories, the one situated in Glasgow, would close in 2022, with hopes to relocate operations to one of six UK locations.
Despite efforts to keep the facility open, 450 employees were given redundancy notices in June of this year.
Source credit: https://www.bbc.co.uk/news/business-59728325