Stephen Jardine: Food price rises could come with benefits

Something absolutely shocking happened this week. In fact, it's fair to say, the world will simply never be the same again.

At front is the new style 150 gram bar of Toblerone showing the reduction in triangular pieces, in the background is the older style 360 gram bar. Picture: AP Photo

Forget Trump, the real upset involved changes to Toblerone. This week the manufacturers revealed a new style of bar which will see widened gaps between the distinctive triangular chunks in an effort to reduce the weight while maintaining prices.

Normally this would be a so-what moment but Toblerone holds a special place in our hearts. It starts as children when any parent or relative who goes away returns like magic with a bar in their bag. Then we become adults and, thanks to years of exposure to the brand, suddenly no journey through an airport terminal seems complete without a Toblerone purchase.

Still manufactured in Switzerland where it was invented, American owners Mondelex International claim rising cocoa prices and the state of the Swiss franc against the euro have forced the changes to the brand. They deny looming Brexit and the falling pound were also factors but not everyone is convinced.

With the pound down 14.5 per cent against the dollar since May, Unilever last month announced their Marmite brand would have to cost more in supermarkets. Then last weekend Birds Eye Fish Fingers and Walkers Crisps joined the list of brands claiming rising costs would have to push up the price.

For manufacturers, it is a stark choice. Absorb higher costs and currency fluctuations, pass it on to consumers or shrink products to hold prices steady.

Supermarket price wars have generally ironed out any spikes and kept prices low in recent years but that could now change.

The highest inflation rate in two years and and currency changes following the Brexit vote make some hikes inevitable.

Just this week Associated British Foods admitted it’s margins were becoming increasingly strained and something would soon have to give. Since ABF own everything from Twinings tea and Kingsmill bread to Jordan muesli and Patak’s pickles, the impact could be widespread.

“The days of food price deflation are behind us. There is a lot of cost pressure on the supply chain and that will feed through to higher prices”, predicts ABF boss George Weston.

But is that automatically a bad thing? No politician will ever dare say it but some of our food is simply too cheap.

In relative terms, European food is the cheapest in the world outside the United States. In western Europe we spend about half what we did 30 years ago. In Britain we spend 15 per cent less than the European average – France spends about 38 per cent more than we do on food to eat at home.

The end result of this is chronic obesity and mountains of waste. Because we can afford to, about 30 per cent of the food we buy ends up being thrown away. In a hungry world, that is shocking.

No-one wants to pay more but we’ve taken low food prices for granted for too long. Some small rises could have a big impact on waste as well as on how much we eat.

If crisps and chocolate shrink to maintain prices, the health of all of us might just benefit.