Millions of families face bigger food bills as the price of bread is set to rise in Britain’s High Street supermarkets, according to a new report yesterday.
For the latest research shows that the popular everyday mealtime staple is set to be hiked in the wake of a surge in the costs of wheat.
The price hike fears follow the warning from food giant Allied Bakeries that it would be forced to pass on losses incurred because of dearer wheat.
Trade magazine The Grocer said that the company, which produces Kingsmill and Allison’s, has reported a loss with commodity inflation – particularly for wheat – combining with lower retail prices to cause ‘significant margin decline’.
Research shows that the popular everyday mealtime staple is set to be hiked in the wake of a surge in the costs of wheat
Warning that the current situation was ‘unsustainable’, George Weston, chief executive of parent Associated British Foods, told investors that the bakeries business was now holding ‘negotiations and discussions’ on price recovery with retailers.
The magazine said that UK wheat futures surged in the wake of the Brexit vote, with prices for feed wheat rising 14 per cent in the six months after the vote.
By February they were up 38per cent year on year putting them ahead of Paris milling wheat prices.
According to the Agriculture and Horticulture Development Board, prices for UK feed wheat have eased since but they remain well above pre-referendum levels.
UK wheat futures surged in the wake of the Brexit vote, with prices for feed wheat rising 14 per cent in the six months after the vote
Alex Waugh, director the National Association of British and Irish Flour Millers, said that UK bread wheat prices are currently up around 20per cent year on year.
He told The Grocer: ‘That is mainly because of the decline in the value of the pound. Wheat is priced globally so the exchange rate really makes a difference.
‘We also had a variable harvest in the UK, which means the proportion of grain meeting the main bread-making wheat specification is down this year.’
Mr Waugh warned that with sterling unlikely to make a dramatic recovery any time soon, and British supplies now set until the next harvest, bread manufacturers are unlikely to see any easing of prices in the near future.
The AHDB reported that prices for Canadian milling wheat have fallen by 8.5per cent over the past three months but remain 4.2per cent higher year on year.