{"id":373826,"date":"2026-03-31T00:34:31","date_gmt":"2026-03-31T00:34:31","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/373826\/"},"modified":"2026-03-31T00:34:31","modified_gmt":"2026-03-31T00:34:31","slug":"food-giants-were-finally-starting-to-cut-prices-then-the-war-began-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/373826\/","title":{"rendered":"Food giants were finally starting to cut prices \u2013 then the war began \u2013 The Irish Times"},"content":{"rendered":"

Producers of everything from toothpaste to baked beans and ice cream are bracing themselves for a second inflationary surge<\/a> in less than five years. But foisting price rises on to consumers to offset the pressure will not be so easy this time around.<\/p>\n

Iran\u2019s control of the Strait of Hormuz, through which about a fifth of the world\u2019s oil and liquefied natural gas is shipped, has resulted in sharp rises in the cost of energy and plastics used in packaging.<\/p>\n

Restricting passage through the waterway, a central part of Iran\u2019s retaliation against the US and Israel\u2019s month-long bombardment<\/a>, has also driven up the price of fertiliser by more than 40 per cent.<\/p>\n

In the weeks leading up to the war consumer goods groups including PepsiCo and Kraft Heinz had announced plans to cut prices to revive stagnant or declining sales volumes as consumers cut spending.<\/p>\n

But the situation now has echoes of 2022, when the aftermath of the pandemic and Russia\u2019s invasion of Ukraine sparked inflation in energy and commodities that led consumer goods groups and retailers to aggressively raise prices.<\/p>\n

While analysts say it is too soon to tell whether fresh inflationary pressures will spiral to the extent they did a few years ago, they agree that western consumers will be less willing to swallow higher grocery bills.<\/p>\n

[\u00a0Irish inflation jumps to 3.6% as energy prices surgeOpens in new window<\/a>\u00a0]<\/p>\n

Last month, Doritos maker PepsiCo said it would reduce prices by up to 15 per cent on certain snacks, with chief executive Ramon Laguarta citing the \u201cstretched\u201d budgets of low- and middle-income consumers.<\/p>\n

At Kraft Heinz, where sales volumes have declined for five consecutive years, chief Steve Cahillane also outlined plans to lower prices, acknowledging they had become \u201cunfriendly\u201d to consumers.<\/p>\n

Nik Modi, an analyst at RBC Capital Markets, said consumer goods companies would find it \u201cmuch harder\u201d to push through price increases in 2026 after raising them aggressively in the previous inflationary cycle.<\/p>\n

\"\"Are Government’s fuel measures betting on a quick resolution to the conflict in Iran?<\/p>\n

\u201cA lot of the companies are realising they maybe went a little too far [on price rises],\u201d he said. US consumer staples stocks have declined by more than the blue-chip S&P 500 index since the US and Israel launched their offensive.<\/p>\n

Analysts at TD Cowen downgraded earnings forecasts for a range of food companies last week, warning that higher input costs and weak pricing power put their dividends at risk.<\/p>\n

Since the start of the conflict, oil prices have jumped from $72 a barrel to $115. The rise is driving up the cost of transport, production and packaging while also eroding consumers\u2019 disposable incomes.<\/p>\n

Barclays analyst Warren Ackerman said \u201cenergy\u2011led inflation shocks are particularly corrosive\u201d for consumer confidence, which has sunk on both sides of the Atlantic since the onset of the war.<\/p>\n

Freight typically makes up 7-8 per cent of food companies\u2019 input costs, according to TD Cowen. In the US, diesel prices have surged above $5 a gallon, up more than 40 per cent since late February, and US trucking lines have increased fuel surcharges at a similar rate, according to freight marketplace DAT.<\/p>\n

The spot price for polyethylene, a plastic resin used in bags and bottles, has increased by more than 50 per cent since the end of February as the conflict restricts the supply of chemicals, according to commodity data provider ICIS.<\/p>\n

Colgate-Palmolive, maker of toothpaste and shampoo, said it was considering raising prices or cutting costs to offset the increase. Bleach producer Clorox said \u201csustained increases\u201d in energy costs would \u201clikely have an impact on our P & L over time\u201d and that it was prepared to cut costs, as well as adjust prices and packaging sizes.<\/p>\n

Andy Searle, consumer lead at consultancy AlixPartners, said rising costs were a \u201cbig challenge\u201d for consumer goods companies, many of which have been trying to revive sales volumes through promotions.<\/p>\n

\u201cObviously that equation has been disrupted by the current situation,\u201d he added. \u201cIf they do move on price … it\u2019s going to be a challenge to get back into volume growth at least this year and potentially next year.\u201d<\/p>\n

Matt Suggett, a partner in the consumer practice at consultancy Simon-Kucher, said that because most retailers required at least a 90-day lag before suppliers could request a price rise, any \u201csecond-order effects [will] materialise over a matter of months to years\u201d.<\/p>\n

Prices of perishable groceries might be first to rise, followed by beverages, which are relatively expensive to transport, and energy-intensive chilled foods, Suggett said.<\/p>\n

More heavily indebted food producers will be forced to raise prices at the earliest opportunity, according to Barclays analyst Andrew Lazar.<\/p>\n

\u201cManagement teams may conclude that it\u2019s better to \u2018fight to live another day\u2019 by preserving margins now,\u201d he wrote. \u201cEven if it further delays the volume recovery.\u201d \u2013 Copyright The Financial Times Limited 2026<\/p>\n","protected":false},"excerpt":{"rendered":"Producers of everything from toothpaste to baked beans and ice cream are bracing themselves for a second inflationary…\n","protected":false},"author":2,"featured_media":373827,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[17297,92254,25023,167669,72,5031,167670,68193,104076,24577,167671,148659,3610,81475,167672,9194,58627,113,99801,426,5471,33286,5472,13284,1350,2119,17311,6285,61,21334,61658,60,11526,67368,46258,589,48901,2096,1886,167673,133900,4674,160094,60413,76541,507,167674,38267,11534,9904,812,4599,66898,2099,33309],"class_list":["post-373826","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-adult","tag-aisle","tag-beautiful","tag-brown-hair","tag-business","tag-buying","tag-casual-clothing","tag-caucasian-ethnicity","tag-cheerful","tag-choice","tag-choosing","tag-concentration","tag-confidence","tag-consumerism","tag-container","tag-customer","tag-dairy-product","tag-economy","tag-females","tag-food","tag-food-and-drink","tag-freshness","tag-groceries","tag-happiness","tag-healthy-eating","tag-healthy-lifestyle","tag-holding","tag-horizontal","tag-ie","tag-indoors","tag-ingredient","tag-ireland","tag-label","tag-long-hair","tag-looking","tag-market","tag-nutrition-label","tag-people","tag-reading","tag-refrigerated-section","tag-refrigerator","tag-retail","tag-searching","tag-selling","tag-shelf","tag-shopping","tag-shopping-basket","tag-store","tag-supermarket","tag-texas","tag-usa","tag-women","tag-yogurt","tag-young-adult","tag-young-women"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/373826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=373826"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/373826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/373827"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=373826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=373826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=373826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}