UK: Rising costs at Cott lead to UK price hikes
Cott Corporation has lined up price increases in the UK due to "escalating input costs".
The Canada-based soft drinks company, which earlier this month said it will move to concentrate solely on private label beverages, said today (30 June) that its UK division has notified its customers of an increase in cost prices by an average 6.5%, in order to "help mitigate significant packaging and input costs".
The cost rises will take effect from 1 September.
"As a high volume, low margin business, providing high quality beverages at low prices, Cott is heavily impacted by the exceptional environment in which we are operating today with oil, fuel and transport costs at record highs in addition to energy, aluminium, paper, corrugated, pet resin and key ingredients also rising beyond expectations," the company said.
Cott noted, however, that it had delayed this action due to taking "significant measures" to address the issue internally and having significantly cut costs through projects including packaging reductions, waste recycling, commodity tenders and forward buying. "These initiatives and further cost reductions just announced, along with additional plans in development, have enabled Cott to limit the scale of the price increase requested from their customers to 6.5% at a time when the factory gate price index is at a record level of 8.9% for the rolling 12 months through May".
Earlier this month, in reconfirming its change of focus to private label, Cott's interim CEO, David Gibbons, said: "Our role is not to invent new categories. Our role is to be 'fast followers' to leverage the growth of expanding categories and to improve profitability for our retail partners at lower prices to consumers."
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