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Business Leaders’ Forum

Manufacturers warned off ‘having a go’ at prices rises

By Mike Stones+

Last updated on 14-Feb-2017 at 10:37 GMT2017-02-14T10:37:22Z

Food manufacturers were warned off 'having a go' at prices increases, regardless of the market context by Clive Black

Food manufacturers were warned off 'having a go' at prices increases, regardless of the market context by Clive Black

Food manufacturers have been warned off “having a go” at prices rises to exploit inflation, at the Food Manufacture Group’s Business Leaders’ Forum (BLF).

In this exclusive video interview, Shore Capital’s director and head of research Clive Black told “If the consumer is at the forefront of manufacturers’ thinking and if the consumer insight is good and a strategic approach is undertaken, then cost recovery can be achieved and there can be a win-win outcome.

“But where a manufacturer believes we are in an inflationary environment and we should have a go at some price rises, I sense that is a dangerous strategy.”  

‘Pay a very heavy price’

Food and drink manufacturers could potentially “pay a very heavy price” if they lost sight of consumers, he added.

“Let’s be clear, the retailers’ margins crashed in the last 10 years – Tesco became a loss-making business. A lot of manufacturing margins and certainly returns are much higher than supermarkets are enduring. That content needs to be borne in mind, in terms of where pricing goes.”

Black urged manufacturers to gain a better understanding of the market and to “understand your consumer, as well as your customer”.

‘Relationship between retailers and suppliers’

In a wide ranging interview, Black went on to describe the relationship between retailers and their suppliers as “tetchy”, following various high-profile rows about Brexit related price increases.

The Food Manufacture Group’s Business Leaders’ Forum  was held at the London office of host sponsor law firm DWF. Other sponsors included: RSA Insurance Group, packaging specialist Charpak and analytical testing provider ALS Life Sciences UK.

Meanwhile, watch out next week for more multi-media reports on and in the February edition of Food Manufacture .

  • This video was filmed and edited by Matt Atherton.
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