Canning industry raises concerns over tin price increase

ArcelorMittal also makes reference to the fact that this increase is based on a formula comprised of a basket of prices from a number of international markets to which the current rand-dollar exchange rate is applied. Irrespective of any formula which has been used to determine these price increases, the impact will see double digit increases across all canned foods.

This has resulted in SA can suppliers increasing the price of cans by between 45 - 55% and will in turn translate into significant increases over the entire range of canned foods.

"An increase of this magnitude will have dramatic implications for our industry," said Rudi Richards, Chairman of the South African Fruit and Vegetable Canners Association. "This will lead to significant increases in the retail prices of canned foods and this will be especially tough for consumers in the lower income bracket."

“This increase comes at a time when there is considerable focus and debate in respect of the targeted single digit inflation rate required in South Africa, as well the urgent need to reduce basic food prices.

"We would like to express our grave concern regarding the magnitude of these increases during a period of global economic slowdown and financial crisis."

"In the short term we express our concern regarding the immediate impact on consumers - especially those dependant on basic, convenient and nutritional canned foods - and in the longer term we express our concern that this could make our products uncompetitive, which would essentially lead to lower demand both domestically and overseas and which in turn would result in reduced raw material intake and loss of jobs.

The export market, where approximately 85% of the canned fruit products are destined, will also be very adversely affected as it will be impossible to recoup this level of increase in these volatile global markets - given the fierce competition, the strength of retailers and the current economic crisis.

"It goes without saying that this increase will have a profound impact on the future of the canning industry and may severely limit its potential to support those many farmers, suppliers, labour and communities dependant on the industry," said Richards. "We call on all parties in conjunction with Government to find ways of reducing this negative impact on canned food prices, employment and economic growth."