Drought flow-on affects prices

National fresh food producer Mrs Crocket's Fast & Fresh is the latest to be affected by the increasing toll of rising produce costs with a drought levy to be introduced in the new financial year after a year of dutifully trying to cover the increases internally.

Mrs Crocket's managing director Mr Rodney Molla said for the last 11 months the company had been absorbing a general produce purchase price increase of 15.9 per cent across the total business.

"The produce increases have been driven predominantly by the drought with the major produce lines increasing between 14-40 per cent," he said.

"This has significantly affected our bottom line and after trying to save the industry from a price change we have no choice but to introduce a levy in order to manage costs." Mr Molla said ingredients for mayonnaise such as canola oil and eggs had also considerably increased.

"Produce increases, coupled with rising wage and utilities costs, is also an impacting factor but we are not about to sacrifice our customer service levels or quality to resolve the situation.

"These are issues many producers are experiencing presently, particularly the farmers supplying fresh produce, but we are proud that we have been able to hold off for this long. We are not the first company to be affected by the drought and we won't be the last."

Mr Molla said the levy would be permanent unless produce prices returned to a reasonable level.

"Given the drought situation, it is unlikely that prices will go down in the near future but we will do everything we can to ensure our prices remain competitive."

Mrs Crocket's specialises in dressed and leafy salads, prepared risottos, mashes and soups, supplying products to the big retailers, independents, fast food and general food service.