Shoppers should prepare for checkout pain at the supermarket to last for years, as food wholesalers says suppliers are continuing to raise prices.
Food wholesaler Metcash, which supplies independent supermarkets including IGA, Foodworks and Drakes Supermarkets, has revealed almost two-thirds of its primary suppliers have sought price hikes in the past 12 months, some multiple times.
The news was revealed in Metcash’s financial results for the previous year up to 30 April, where the company reported revenue was up 6.4 per cent to $17.4 billion and net profit was up 2.7 per cent.
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The company noted the inflated profits were due to record sales growth caused by rising inflation, which in turn is being caused by a range of factors from the pandemic to Russia’s invasion of Ukraine.
“Wholesale price inflation accelerated in the second half, with price increases being received from about 60 per cent of the supplier base,” says Doug Jones, CEO of Metcash.
“We are continuing to work closely with our suppliers and retailers to help shoppers manage the impact of inflation by providing better value options through offering a wider range of products at competitive prices.”
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Canned goods producer SPC told The New Daily it also expects price rises to continue into next year. CEO Robert Giles said the company had seen its cardboard box suppliers raise prices by 14 per cent, due to the supplier’s increased electricity and gas costs.
“We just finished a significant price increase for our tomato season next year based on fertiliser, diesel and labour,” Mr Giles said.
“The flow-on effects are being felt everywhere. We’ll have to pass on packaging increases. Next season we will have to pass on fruit increases and a year later we will probably have to pass on energy price increases.”
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The inflation rate is sitting at 5.1 per cent, and Reserve Bank of Australia (RBA) governor Philip Lowe believes it could hit seven per cent by the end of the year, before taking “a couple of years” to return to normal levels.
The RBA raised the official interest rates in an attempt to curb inflation and has indicated it may do so again before the end of the year.
“It is going to be some years, I think, before inflation is back in the 2-3 per cent range. Over the next couple of years, it will gradually come down,” Dr Lowe said.
“That is why it is important we chart this path back there and people have confidence that we will do that.”
Meanwhile, an Aussie farmer has accused the major supermarkets of “manipulating” prices, claiming he’d be driving a Ferrari if he was paid what retailers are charging.
Guy Gaeta, from Orange in NSW, says cherries are sold for around $5 per kilogram, but once they hit the shelves, the price rises to around $15.
“We wear most of the cost,” he told news.com. “Yes they’ve got costs too, but we (the farmers) are not putting 80 per cent on top of the price we agree on.
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