Consumers face bread price hikes over wheat supply crisis

CONSUMERS could be hit with a hefty hike in the price of a loaf of bread because world wheat stockpiles are at their lowest level in 25 years, the Irish Bread Bakers’ Association (IBBA) has warned.

Noting that poor harvests in various parts of the world had dramatically increased the cost of raw materials, the IBBA said this would eventually lead to higher prices for Irish consumers.

Prices have surged to 10-year highs after a drought in Australia threatened to cut its harvest in half. Harvests have also been hit in Ukraine, Argentina, and North America.

Paul Kelly, director of Food and Drink Industry Ireland, speaking on behalf of the IBBA, said the major increase in the cost of raw materials comes at a time when other business costs are also rising much faster than general inflation.

“Bread bakers are experiencing increases of up to 20% in the cost of flour, the key raw material in bread, and increases of over 30% in the cost of gas, their main energy source,” he said.

Mr Kelly said Irish business is not immune to cost increases, which must eventually find their way into prices. But this does not mean that price increases are profit increases.

“While little that can be done about rising global prices, the Government must rein in spiralling domestic business costs that it has some control over.

“The cost of energy and waste management are just two areas where decisive action is needed,” he said.

Mr Kelly said that over the past two years, a number of bakeries have either closed or significantly rationalised their businesses.

“Failure to recoup these serious cost increases in the market place will inevitably lead to further rationalisation and job losses,” he said.