Wednesday 31 May 2023

Lavazza in open talks with UK retailers about prices

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MILAN – Italian leading coffee roaster Lavazza said Thursday it was in talk with UK retailers about how to manage its soaring costs. “We have seen an 80% average increase in the cost of green beans in a year,” said Pietro Mazzà, General Manager UK and Regional Director UK & Nordics at Lavazza Group in an interview to The Press Association.

“We are all facing tough times. The situation is troubling and will be for some time, so we need to keep the conversation [with retailers] as free and open as possible.”

Mazzà said the cost of a 1kg bag of whole Lavazza beans had increased by £2 in the past 14-16 months to about £12.

He stressed the fact that it was retailers who set the retail price of Lavazza products rather than the company itself.

A Lavazza spokesperson said the increase in the price of raw materials would have “a knock-on effect of the cost of coffee for retailers, and subsequently for consumers”.

The comments come as Heinz has stopped supplying Tesco with some of the UK’s family favourite products in a dispute over pricing.

Kraft Heinz, which owns the brand, said its production costs were rising but it was working with Tesco to resolve the situation quickly. But Tesco said: “We will not pass on unjustifiable price increases to our customers.”

According to the latest Office for National Statistics data published on Thursday, 30% of businesses expect to increase the price of goods or services they sell in July, with energy prices still blamed as the main factor, reports The Guardian.

Lavazza said instant coffee still made up more than 60% of the UK market, but sales of beans had grown 30% over the last three years.

This as part of the “premiumisation” of the UK market as consumers sought to enhance their at-home coffee experience as a result of pandemic lockdowns, Mazzà explained.

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