Stein Erik Hagen’s giant, which is behind Grandiosa, Toro, Jordan, Nidar, Stabburet, Lano and a large number of other Norwegian brands, is experiencing much higher costs.
The case is being updated.
It appears from the company’s quarterly presentation on Friday.
It states that the prices of goods that the company itself purchases, such as oil, meat and vegetables, have increased enormously and that it must be compensated for.
“There have been particularly high price increases in vegetable oils, cereals, meat, vegetables, dairy products and packaging,” the company writes. At the same time, they emphasize that they see that the cost of transporting the goods has increased sharply.
Increased costs
“Global value chain disruptions have also led to higher freight rates and
delays in transport. The combination of higher raw material prices and freight rates has had an effect
Orkla’s purchase prices will be negative in the third quarter of 2021 », writes Orkla, which therefore warns that the prices of the goods they sell to grocery chains, such as Rema 1000, Norgesgruppen and Coop, must rise.
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This is clear both in the section for Orkla Foods, where Grandiosa, Big One and Toro are located, and Confectionary and Snacks, with brands such as Kims and Nidar,
«However, earnings growth in the quarter was partially offset by higher purchasing costs across all markets. Prices increased for more
raw material categories, packaging, as well as transport and energy. This is expected to continue and will require further price increases in the future “, it is stated in the Foods section.
“It is expected that the cost increases will continue in the future and it will be compensated with price increases,” it says under Confectionary and Snacks.
2022
Orkla’s CEO, Jaan Ivar Semlitsch, says that prices will not rise until the beginning of 2022. This probably also applies to Norway, as suppliers such as Orkla can only raise prices a couple of times a year, including around 1 January.
Also read: The Orkla chief warns of price shocks after commodity prices have skyrocketed
Orkla’s competitors, such as the British giant Unilever, have also stated something similar in the past.
Read more here: Grocery giant sets up prices: – Will get even worse
Otherwise, Orkla can point to strong developments in operating revenues, thanks in part to increased prices, which rose from NOK 34.5 billion in the third quarter last year to NOK 36.4 billion this year.
Despite the headwinds, profitability is not so bad either. Profit is NOK 4.5 billion, compared with NOK 4.1 billion in the same period last year.
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