Food prices to hit households as prices soar

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Food prices to hit households as prices soar

The maker of Mr Kipling cakes and Bisto gravy said it would have to raise prices as the costs of wheat, dairy and energy soar.

Premier Foods CEO Alex Whitehouse said the company was facing inflationary pressures of more than 10 per cent within its business and that while it would try to mitigate this by cutting costs elsewhere, some of the extra expense would have to be passed on to consumers.

Andrew Bailey, Governor of the Bank of England, warned of apocalyptic food price increases.

For some families that s going to be tough Whitehouse said that food inflation is important and that is going to be hard for some families. He said that consumers are increasingly looking for good value meal solutions and that they are saving money by eating at home rather than visiting restaurants.

Premier Foods reported a 16.4 per cent rise in pre-tax profits to 102.6 million in the year to April 2, beating City forecasts. It said it had gained market share during the period, with sales rising by 6.3 per cent to 900.5 million.

Premier Foods shares jumped by more than 10 per cent, or 10 p, to 117 p.

Premier Foods has had a chequered recent history due to a rejected takeover approach, a bloated debt pile and a large pension deficit, which has crippled investment in the business and stunted sales growth.

The company's recent improvement in trading performance has led to an overhaul of its pension schemes, which has resulted in a 125 million reduction in payments, and it has reduced debt with leverage now at 1.7 times earnings. Whitehouse said over the last two years we have completely transformed our financial position.