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Major Japanese snack food maker Calbee Foods Co will raise prices of its mainstay products as early as November. The markup on the products, which include potato chips and "Kappa Ebisen" snacks, reflects surging prices of raw materials such as cooking oil, Chief Executive Officer Yasuo Nakata said at a meeting to announce the company's financial results.
Calbee reduced the portion sizes of its snacks in January last year to effectively raise prices after a poor potato harvest in Hokkaido.
"Production costs will go up by some 2 billion yen this year due to high-flying raw material prices. We have no choice but to pass that hike on to product prices," Nakata said.
Product prices are expected to increase 5 to 7%, according to Nakata. The retail price of an 85-gram bag of potato chips will be about 152 to 155 yen, up from the current 145 yen.
© JCN
9 Comments
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Sarge
"Poor potato harvest in Hokkaido"
How about importing Idaho potatoes? Nah...
franz75
How do they transport them from Idaho? Cheapest way might be to use the pacific ocean currents
Coligny
No butter, no potatoes... what are they good at in Hokkaido ?
nath
Better start stocking up now - potato panic pandemonium
thepro
I prefer corn chips
wilbur
they use real potatoes ?
seiosig
"No Choice". Well, how about "cut your profit margins"? It's frustrating to see that the U.S. corporate sector has exported the "increase net income at all costs" sickness to Japan.
Betting
"It's frustrating to see that the U.S. corporate sector has exported the "increase net income at all costs" sickness to Japan".
I'd have to agree with that, how much profit is enough?
seiosig
To answer your question, exactly when the firm must raise prices in order to his earnings targets and dividend payouts. In other words, managers should be expected to reduce margins as costs approach revenues. Of course, management compensation is tied to earnings targets more than any other metric of the business, so don't expect my idea to fly anytime soon.