Hobnobs maker McVitie’s warns biscuit prices set to rise

Inflation, rising costs and Covid-19 all contributing to difficult trading environment for parent company Pladis.

Hobnobs maker McVitie’s warns biscuit prices set to rise iStock

The price of biscuits such as Jaffa Cakes and Hobnobs is set to go up by as much as 5% as global prices for sugar and other key ingredients rise.

Pladis, the company behind McVitie’s, says costs have up so much that it might have to pass them on to consumers.

“We’ve dealt with substantial challenges in the past in the food industry but it’s the combination of these issues, as well as the scale of some of them that is unprecedented,” said Pladis UK managing director David Murray.

“Like many other categories faced with this scale of inflation, we can’t ignore that costs have gone up and this may flow through to higher prices.”

Part of the price rise is down to higher commodity costs. In the UK, the price of palm oil, wheat and sugar have all spiked, with prices rising by around 15%.

Meanwhile, the business has also faced the Covid-19 pandemic, which left many staff off work with illness. Covid has also put pressure on supply chains around the world, including those supplying biscuits.

The price rise is only one of several that are likely to hit consumers in coming months.

The Office for National Statistics estimates that inflation – which measures increases in the cost of living for many families – hit 4.6% in the 12 months to November.

Energy bills are set to rise by further hundreds of pounds from April next year, putting even more pressure on struggling households across the UK.

The McVitie’s factory in Tollcross, Glasgow, is set to cease operations after Pladis confirmed earlier this year it intends to proceed with the closure of the site.

Almost 500 workers are set to lose their jobs when operations at the factory cease in the second half of 2022.