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Apr 07, 2019

Breakfast Cereal Price Increases

We are increasing the price of a number of our Nestlé and Uncle Tobys cereals. As we appreciate that no one likes a price rise, we’d like to explain why we’ve done this.

Our factory is based in the small farming community of Wahgunyah in Victoria, Australia.  In the last year, we’ve seen neighbouring farms affected by first drought, and then frosts, which has had an impact not just on those farmers, but the whole community. As we prioritise buying oats from farms near our factory,  this has made it harder for us to source the oats and grains we need, particularly oats that meet the higher specifications of the superior Uncle Tobys oat, and we’ve had to look further afield to find enough. Right around Australia, the cost of grains has risen significantly.

It’s not just the price of grains that has affected us. Since mid-2018, as well an average increase of 37% in the price we pay for oats and other grains, we’ve also seen increases in the prices of fruits and nuts (10%), and since 2015, increases in the cost of electricity (28%) and gas (21%).

At the same time, we’ve aggressively reviewed every aspect of our operations so that we can absorb as much of the impact of the costs as possible, and don’t have to pass all the increase on. On average, our prices are rising by an average of 7% - although it varies between products – which is considerably less than the increase in the cost of producing them.

There is one thing we won’t compromise on: the superior quality of our Uncle Tobys cereals.

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