Walkers and Birds Eye, two major suppliers to supermarkets in the UK, are reportedly seeking price increases of up to 12% from their customers following the dramatic fall in the value of the pound.
Following the UK’s decision to leave the European Union in June, the pound’s value has dropped by around 14.5%, prompting many brands to try and hike their prices. Birds Eye and Walkers, suppliers of fish-based frozen foods and crisps respectively, now join the likes of Typhoo and Unilever in attempting to pass on their rising costs.
Birds Eye, which is owned by New-York listed, Nomad Foods, has said that is seeking a price increase of 12% because of the fact that the raw materials it uses are priced in dollars and so its costs have risen as a result. It is also said to be looking at reducing the size of its packs on certain products to help offset cost increase.
Speaking to The Guardian, Wayne Hudson, Birds Eye’s UK and Ireland managing director, said: “Increasing costs is not a decision we take lightly, and the last time it was necessary to raise costs was in 2012. As such, we have been in open and collaborative conversations with the retailers for some time now and are working closely with them to minimise any impact on our customers.”
Walkers, owned by PepsiCo, is believed to be seeking price increases of between 5 and 10%. The news has been met with criticism with many wholesalers claiming that it is a “massively opportunistic” move. It has since denied that it is using Brexit as an excuse to hike prices.
“Whilst our potatoes are British, we import a number of different ingredients and materials to produce a finished packet of Walkers crisps such as seasonings, oil for frying and key raw materials used in our packaging film," a spokesperson from Walkers said.
These negotiations over pricing come after Unilever’s high profile price row with Tesco.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.