Lavazza has announced that it is in talks with UK retailers about a potential hike in coffee prices. The Turin-based roaster seeks to resolve the question of “soaring costs as almost a third of UK businesses predict they are likely to increase the price of their goods or services next month.”

The cost of a 1kg bag of Lavazza whole beans had increased by £2 in the last 14 to 16 months to £12 due to rising costs of green beans, fertiliser, equipment and shipping. According to Lavazza, the company has been absorbing the costs and trying not to pass them on to consumers, but the upward pricing pressures such as inflation and global price hikes are proving to be very costly.

We have seen an 80% average increase in the cost of green beans in a year. 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.

Pietro Mazza, UK General Manager, Lavazza

Many businesses, brands and retailers are facing the question of how to deal with the upward pricing pressure of all links in the supply chain, ingredients included. It is expected that the prices will continue to increase well into the autumn and even next year.

Bartalks has regularly reported on the rising prices of commodities in several industries that are directly connected to coffee production, leading to the price of coffee skyrocketing as well. Recently, Heinz has ceased supplying Tesco as the retailer was unwilling to raise prices for Heinz products.

Almost a third of UK businesses predict they are likely to increase the price of their goods or services next month

The latest data from the Office for National Statistics show that “30% of businesses expect to increase the price of goods or services they sell in July, with energy prices still reported as the main factor.” Prices have also risen in accommodation and food service businesses such as hotels, restaurants and cafes.

In order to mitigate the current situation, the government “has launched a review into cutting import taxes on goods not grown in the UK, such as oranges, bananas, olives and rice, in an attempt to reduce food costs.” This could help reduce prices by about 10%.

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