Coffee bean

Lavazza in talks with UK retailers as cost of coffee beans jumps 80% | Food industry

Coffee maker Lavazza says it is in talks with retailers about how to handle its soaring costs as nearly a third of UK businesses predict they are likely to raise the price of their goods or services next month.

Pietro Mazzà, UK managing director of Lavazza, said the cost of a 1kg bag of Lavazza whole beans has risen by £2 over the past 14-16 months to around £12 as the price of beans rises. greens and components for equipment increased.

“We saw an average 80% increase in the cost of green beans in one year,” Mazza said. “We all go through difficult times. The situation is troubling and will remain so for some time, so we need to continue the conversation [with retailers] as free and open as possible.

A Lavazza spokesperson said rising raw material prices would have “a ripple effect on the cost of coffee for retailers, and subsequently for consumers.”

The comments come after Heinz suspended the supply of its products to Tesco, leaving some shelves in stores and its online store out of stock in some areas after a dispute over rising prices.

Brands and retailers are grappling with how to cope with soaring costs, amid substantial inflation in energy, transport costs, ingredients such as tomatoes and cooking oil and cooking materials. packaging such as cardboard and cans.

Retailers have told shoppers to expect price increases to continue into the fall and potentially into next year as they are forced to pass on cost increases.

According to the latest data from the Office for National Statistics released on Thursday, 30% of businesses plan to raise the price of goods or services they sell in July, with energy prices still reported as the main driver.

Half of all businesses said their prices increased in May compared to April 2022, with that figure rising to more than 70% for accommodation and food service businesses such as hotels, restaurants and cafes and nearly 60% for retailers and wholesalers.

Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said: “It looks like the price hikes consumers have had to swallow at checkouts could only get more painful this summer.

“Businesses are really struggling with higher input prices, and rising gas and electricity bills in particular are getting so onerous that bosses can’t keep absorbing them.”

As the government comes under fire for the soaring cost of living, Boris Johnson has launched a review to cut import duties on produce not grown in the UK, such as oranges, bananas, olives and rice, with the aim of reducing food costs.

It has been reported that the changes could help offset inflation, reducing prices by around 10%.