Swiss food and beverage corporation Nestle has said it is battling steep cost inflation, which is expected to result in higher prices for Brit lovers of the brand’s cereals and chocolate bars
Fans of Shreddies and KitKats may soon be in for an unhappy surprise at the checkout, with their producer Nestle warning that more price rises could be on the horizon.
The Swiss food and beverage corporation has said it is battling steep cost inflation, which is expected to necessitate higher prices, Birmingham Live reports.
Nestle produces Coco Shreddies, Frosted Shreddies, Honey Cheerios, Nesquik and Cookie Crisp cereals as well as beloved Yorkie, Aero and KitKats.
Mark Schneider, chief executive of the Swiss food group, said: “Cost inflation continues to increase sharply, which will require further pricing and mitigating actions over the course of the year.”
“In these first months of the year, the war in Ukraine has caused unspeakable human suffering,” he added.
“We remain focused on supporting our colleagues there and providing humanitarian relief, while standing with the international community in the call for peace.”
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Hiking prices to keep things moving in the right direction in the wake of input cost inflation certainly won’t be a course of action management want to have to take.
“But nonetheless it’s the position Nestle finds itself in and doesn’t look likely to go away any time soon, which adds pressure to the group’s volume-led strategy.
“So far, volumes have still been able to move in the right direction aided by the recovery in out-of-home channels that saw demand drop off while restrictions were in place last year.”
Nestlé is responsible for the likes of the KitKat, a hugely popular chocolate bar in the UK.
It also makes some of our leading cereals – including Shreddies and Cheerios.
The news of more incoming price rises comes as the cost of living continues to soar, with prices having risen by 7% in the 12 months to March.
It was once more the highest point since March 1992, when inflation stood at 7.1%.
The rise was higher than the 6.7% that analysts had expected and was driven by fuel, restaurant and food prices.
But the increase does not even take into account the average 54% increase in energy bills that was applied to around 22 million households two weeks ago.
This will not appear in inflation figures until next month, when April’s data is expected to show another jump in inflation and demonstrate the increased squeeze on ordinary people.
The Bank of England has predicted that inflation could peak at around 8% in April once the energy price cap increase is factored in.
Inflation is the rate at which prices rise. If a loaf of bread costs £1 and that rises by 5p, then bread inflation is 5%.
The Office for National Statistics said the biggest contributor to rising inflation was transport, with average petroleum prices rising by 12.6p per liter between February and March, the largest monthly rise since records began in 1990.
This compares with a rise of 3.5p per liter between the same months of 2021.
Diesel prices also rose by 18.8p per liter this year, compared with a rise of 3.5p per liter a year ago.
ONS chief economist Grant Fitzner said: “Broad-based price rises saw annual inflation increase sharply again in March.
“Amongst the largest increases were petroleum costs, with prices mostly collected before the recent cut in fuel duty, and furniture.
“Restaurants and hotel prices also rose steeply in March while, after falling a year ago, there were rises across a number of different types of food.
“The price of goods leaving UK factories has continued to rise substantially with metal and transport products both at record highs and food reaching its highest rate for over a decade. Raw material costs also rose, with a notable increase in the price of crude oil. “
Chancellor of the Exchequer Rishi Sunak directed households to the Household Support Fund..
He said: “We’re seeing rising costs caused by global pressures in our supply chains and energy markets which could be further exacerbated by Russian aggression in Ukraine.
“I know this is a worrying time for many families, which is why we are taking action to ease the burdens by providing support worth around £22 billion in this financial year, including for the most vulnerable through our Household Support fund.
“We’re also helping as many people as possible into work – the best way for families to gain economic security in the longer term.”