Lavazza in talks with UK retailers about costs if inflation bites | Food and Beverage Industry

Coffee maker Lavazza says it is in talks with retailers on how to contain rising costs, as nearly a third of UK businesses expect they are likely to increase the price of their goods or services next month.

Pietro Mazzà, the general manager of Lavazza in the UK, said the cost of a 1kg bag of whole Lavazza beans had increased by £2 over the past 14-16 months to around £12 as the price of green beans and components for equipment increased.

“We’ve seen an average 80% increase in the cost of green beans in one year,” says Mazza. “We are all going through difficult times. The situation is disturbing and will continue for some time, so we need to continue the conversation [with retailers] as free and open as possible.”

A Lavazza spokesperson said the rise in the price of commodities “would have a knock-on effect on the cost of coffee for retailers and subsequently consumers”.

The comments come after Heinz paused delivery of his goods to Tesco, leaving some shelves in stores and his online store out of stock in some areas after a row over price increases.

Brands and retailers are struggling to cope with rising costs amid sharp inflation of energy, freight costs, ingredients such as tomatoes and cooking oil and packaging materials such as cardboard and cans.

Retailers have informed their customers that they expect price increases to continue into the fall and possibly next year as they are forced to pass on cost increases.

According to the latest data from the Office for National Statistics released on Thursday, 30% of companies expect to increase the price of goods or services they sell in July, with energy prices still the main factor.

Half of all companies said their prices had risen in May from April 2022, with more than 70% for lodging and food service businesses such as hotels, restaurants and cafes and nearly 60% for retailers and wholesalers.

Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said: “It looks like the price hikes consumers have had to swallow at the register are only going to get more painful this summer.

“Companies are really struggling with higher input prices, and rising gas and electricity bills in particular are getting so heavy that bosses can no longer accommodate them.”

With the government coming under fire for the rising cost of living, Boris Johnson has launched a review to cut import taxes on goods not grown in the UK, such as oranges, bananas, olives and rice, in a bid to cut food costs. to lower.

It was reported that the changes could help offset inflation, pushing prices down by about 10%.

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