From The Province - March .6, 2011
by Susan Lazaruk & Glenda Luymes
Expect to pay more per mouthful as global unrest and rising fuel prices drive up the cost of food both internationally and at home.
That’s the message from analysts as Canada’s wholesale suppliers and grocers are hinting they may pass on rising commodity prices to consumers.
“We’ve heard from suppliers in the last few weeks that they expect to raise prices up to five per cent,” Union Gospel Mission spokesman Derek Weiss said Saturday.
Weiss said the latest increases are part of a larger trend. UGM increased its food budget by about five per cent from 2008 to 2009, but higher-than-anticipated costs actually resulted in a 10 per cent increase.
Projections for 2011 are similar.
“This hits us two ways,” he said. “We’re facing higher costs, but our clients are also being squeezed. A pinch for us is a genuine plight for them.”
CEO of the Greater Vancouver Food Bank Society Cheryl Carline said rising food prices will “impact us in a big way,” adding the foods most affected are staples.
“It’s difficult because the factors that are affecting prices are, to a large degree, external to the country as a whole, and there’s not a lot we can do about it.”
Sustained increases in the cost of food commodities are also expected to trickle down every aisle of the grocery store by year’s end, according to analysts.
BMO Capital Markets economist Kenrick Jordan said there’s always a lag between higher commodity prices and consumer food prices, so shoppers should expect a five- to seven-per-cent jump in consumer food prices.
“We’re concerned as a business and we’re concerned as consumers,” said Frank Deacon, general manager at Stong’s Market, an independent grocery store in Vancouver.
He said the rise in prices for corn and wheat, caused by the drought in China, and in meat and deli products is worrying and noted “produce is completely affected by the rising oil prices, especially at this time of year when everything is coming from the U.S. and Mexico.”
He said as an independent, Stong’s buyers can price out new suppliers weekly to look for the lowest wholesale price to try to keep prices low but there are some hikes it can’t avoid, like the five per cent minimum increase for Weston’s bakery products announced last week.
“(Baked goods) is not something we can shop around for,” he said.
Deacon said customers can expect increases in the cereal and pasta aisles generally and for certain produce items because of the recent cold snap on the Pacific Coast.
Rising fuel prices and uncertainty in oil-producing countries like Libya are only compounding the situation, said David Wilkes with the Retail Council of Canada. Canada’s highly competitive grocery sector can only shield food shoppers from higher prices for so long, he added.
According to GasBuddy.com, the average price of unleaded gas in Vancouver Saturday was 129.9, up from 126.4 last week, 120.5 one month ago and 114 last year at this time.
For their part, Canada’s major grocers — including Loblaw, Sobeys, Metro Inc. and Walmart Canada — declined to comment on possible price hikes.
Their response comes after the Weston foods division of George Weston Inc. announced the company is increasing the price of its bun and bread products by an average of five per cent, beginning next month. This means retail grocers will have to pay the baked good giants more for products sold under brands such as Harvest Country bread, Wonder Bread, Weston and D’Italiano — and decide whether to pass on the difference to shoppers.
Local restaurateurs have been dealing with steadily-rising food prices for months.
Contacted recently about the cost of tomatoes due to a cold snap in Mexico, co-owner of Vera’s Burger Shack Gerald Tritt said weather always plays a role in produce availability, “but there doesn’t seem to be an end to the rising of food prices in general.”
Tritt blamed natural disasters, political instability in wheat-producing nations and the use of corn for fuel.
“It’s typical to experience some shortages, but I think people need to get ready for a major jolt in the economy of food,” he told The Province.
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