Rising costs hit Nelson
They say to stay competitive they have held back from passing on the full extent of production cost increases to customers until now.
Founders Brewery co-owner John Duncan said his brewing costs had risen 15 to 20 percent in the past year, driven by malt, hops and transport costs. Malt prices had rocketed 50 percent in the past year.
Between the brewery and the cafe that runs alongside it %26quot;just about every other day we get a letter of some price increase,%26quot; he said. %26quot;There seems to be no end in site.%26quot;
Founders was trying to cut costs by being more efficient, not over ordering and holding less stock.
%26quot;For a small business it%26#39;s a double-edged sword because you don%26#39;t have the buying power of a large business,%26quot; Mr Duncan said.
The last time the brewery raised its prices was a year ago and it was preparing, reluctantly, to do so again once it knew at what level its customs duties would be set.
%26quot;It%26#39;s the last thing we want to do but to stay in business we%26#39;ve got to cover our costs at least.%26quot;
Tozzetti Panetteria manager Wendy Barlow said the bakery had endured four months of the rising cost of raw materials, which had resulted in a loaf of bread costing at least 30 percent more to produce.
Three weeks ago prices were raised an average 15 percent across all products.
She said this should have been done before Christmas but the bakery had held off.
The bakery was not willing to compromise quality by buying cheaper ingredients, she said. Customers were told in advance about the increases and they had been understanding as they knew about rising food costs from shopping at the supermarket.
Kerstiens chocolate company owner Marcel Van Arendonk yesterday increased the price of some products by 6.5 percent for bulk buyers.
This was driven by the rising cost of fruit, nuts and dairy products. In the past two weeks the price of sesame seeds had gone up $1.50 a kg to $5.60.
The price of cream had increased to $6.50 from $5 three months ago.
His business was trying to absorb the costs to stay competitive, he said.
Nelson producers were at a further disadvantage due to the cost of transporting products in and out of the region, Mr Van Arendonk said.
%26quot;We%26#39;ve been absorbing it for so long, but we can%26#39;t do it any longer.%26quot;
R and C Conning market gardens owner Rob Conning said his fertiliser, chemical spray and fuel costs had gone up, but not dramatically.
