Consumer prices will continue to soar due to rising production costs, Lurpak producer warns | Business Newsletter
The UK’s biggest milk producer has admitted milk prices will continue to rise as sky-high energy costs have risen by 200%.
Arla Foods commercial director Peter Giortz-Carlson told Sky News that input costs, due to the high war in Ukraine, would have to be passed on to customers.
His company sells dairy products like Lurpak butter, Cravendale milk and Skyr yogurt to supermarkets nationwide.
Mr. Giortz-Carlson notes how the cost of packaging and feed has increased by as much as 40%.
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The company owner said the price increase here is because the food industry is partly dependent on Ukraine for animal feed.
He added that, in his 20 years in the industry, he has “never seen anything like it” and doesn’t think the industry has “peaked” in terms of food price increases.
It comes as the CPI headline inflation rate hit 9% on Wednesday, and forecasters warn that number will be even higher later in the year.
The Governor of the Bank of England, Andrew Bailey, this week raised his concerns about the “doomsday” rise in food prices and said he felt “powerless” in the fight against inflation.
Speaking to Sky News, Mr Giortz-Carlson also revealed that dairy farmers are currently losing money on their farms due to rising fertilizer, feed and energy costs.
Milk supply could be affected, he warned, as the income farmers receive “cannot cover the costs” they now have to keep running their farms.
Arla Foods is trying to avoid a situation where farmers cannot supply enough milk due to rising production costs, which could drive food prices up.
“The main job of Arla Foods here is to keep the products circulating and ensure that there is a supply of food on the shelves,” said Giortz-Carlson.
During a visit to his company’s Stourton Dairy Plant on Wednesday, Mr. Giortz-Carlson said the price increases there will persist for some time as the food industry is partly dependent on Ukraine for feed. feed.
He said only 50% of conventional feed is expected to be exported from Ukraine and there is uncertainty about the country’s harvest due to the impact of the war with Russia.
He also raised concerns about rising fertilizer prices – as well as its availability – and said that “this is a very difficult storm that we are facing and it is happening from all sides and roles Our job in this is to keep the product in circulation.”
Arla Foods is a cooperative owned by around 2,300 British farmers in the UK alone.
