Business / ‘A vicious circle’: rising cost of food puts strain on local suppliers
THE COST of providing school meals in Shetland has experienced big increases – not just through the price of food, but the cost of catering items and cleaning materials too.
But Shetland Islands Council catering team leader Neil Beattie said the amount pupils pay to buy a meal in school has not been increased.
Meanwhile the director of a Shetland wholesaler said there have been “big jumps” in the cost of certain products.
Carl Cross, of Hughson Brothers, described it as a “vicious circle” which involves increased costs of fuel, energy and raw materials.
It comes as inflation continues to rise – and the cost of food and other goods – in what is being dubbed the cost of living crisis.
Figures presented to a council meeting last week showed that the cost of school meal supplies are resulting in a projected overspend against budget of £85,000.
Beattie said it was not just food ingredients that has gone up in price.
“There are huge increases in catering sundries, packaging and cleaning materials which have all gone up dramatically, which has increased the cost of providing school meals,” he said.
“We are experiencing the same increases as everyone else and unfortunately, there doesn’t seem to be any respite in sight.”
Over at wholesaler Hughson Brothers many products it takes in from source – before supplying them to local businesses – have gone up sharply in price.
Cross used the example of a tin of Heinz soup, which he said was previously price marked at £1.09 but has risen to £1.55.
The cost of a ten litre tub of Hellmann’s mayonnaise has also gone up by around one third, he said, due to the price of oil.
“Cheese has gone up a couple of times and that’s down to dairy farmers reducing their herd because they can’t afford to feed them, because the feed has gone up,” Cross added.
He said the price increases are being attributed to rising costs in fuel, energy and raw materials – with Brexit and the Russian invasion of Ukraine also factors.
But Cross said in his personal view there may be some “profiteering” going on among the largest brands.
He added that with energy price rises on the horizon, there could be shops in Shetland looking at reducing their bills by turning off a freezer, for example – which could in turn decrease the range for customers.
“I wouldn’t say they [customers] are buying less at the moment, but that doesn’t mean that they won’t going forward,” Cross said.
“And people will start shopping around – because if their energy prices are going up, they’re bound to start shopping around for cheaper food products.”
Cross also said he has started to see delivery surcharges being imposed from suppliers, including a £120 fee on a sugar order because it was under five pallets.
Hughson Brothers also produces and sells Stewart’s rum, and Cross said the price of glass for its bottles had risen sharply.
Meanwhile one Lerwick based takeaway is choosing not to pass on cost increases to its customers.
The Dragon House said on social media that the cost of “everything” has gone up dramatically in the last nine months.
The example was used of a drum of Henry Colbeck oil – £18.50 at the start of the year, now £42.50.
The takeaway said other supplies have had a sharp rise, including beef and chicken.
It said the easiest option would be to increase prices, but it the takeaway has been busy enough for it to absorb the hit.
“We thought with the winter coming and everyone have energy bills to worry about…” the business said.
“We think it’s best to freeze the price as it is til the likes of April to see how things goes from there.”
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