- Becky Morton
- BBC News
8 hours ago
Chocolate Kat maker Nestle raised its prices once more due to “unprecedented” cost increases.
The Swiss food giant said it raised prices by 6.5 percent in the first half of this year.
McDonald’s and Coca-Cola also announced price increases for their products this week.
Companies face rising costs for resources such as fuel, wages and the components of their products, and prices for British consumers are rising at the fastest rate in 40 years.
Nestlé, which also makes Cheerios and Smarties, had already raised prices by 3.1 percent in the last three months of 2021.
The company’s chief executive, Mark Schneider, said the price increases were carried out in a “responsible way”.
“We have reduced the impact of unprecedented inflation pressures and supply chain constraints on expenditures through disciplined cost control and operating efficiencies,” he added.
Price increases were highest in North America, at 9.8 percent, compared to 4.9 percent in Europe.
Nestle said organic sales rose 8.1 percent in the first half of this year. The company raised its organic sales growth forecast for this year to between 7 percent and 8 percent.
Net profit decreased by 11.7 percent to 5.2 billion Swiss francs, equivalent to 5.4 billion dollars, including tax hikes and write-downs on property and equipment in Russia.
In March, Nestle stopped investing in Russia and pulled its famous brands from the country following the invasion of Ukraine.
The company, however, still sells essentials like infant formula and medical nutrition products there.
The war in Ukraine has further increased the cost of fuel and food, with Britain’s inflation rate – the rate at which prices are rising – 9.4 percent in June, its highest level in more than 40 years.
Some companies are also forced to raise wages to attract and retain employees, with job openings in large numbers. But wage increases are not keeping pace with the rising cost of living.
McDonald’s said on Wednesday it had increased the price of a cheeseburger for the first time in more than 14 years – from 99p to 1.19, more than £1 in Britain.
This came following the beverage giant Coca-Cola told Bloomberg that its global prices rose by an average of regarding 5 percent.
Earlier this week, Amazon also announced it had increased prices for UK customers due to higher costs, with the price of its main subscription service rising by £1 per month from September.
