Rising food prices will rumble on for up to three more years, according to the chief executive of PepsiCo.
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Indra Nooyi, chairman and CEO of the US-based food and beverage group, told UK newspaper The Times that government programmes promoting biofuels would drive up the price of food further.
“Structural inflation for food is here to stay for another two to three years,” Nooyi said.
Top food industry executives at Nestlé, Unilever and Kellogg, have pinpointed increased biofuel production as a key factor behind rising commodity costs, which are leading to higher shopping bills for consumers.
The link between biofuels and more expensive food was highlighted yesterday (21 January) by a group of UK politicians in a report that also cast questions on biofuel as a green alternative to oil.
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By GlobalDataA raft of companies, including the likes of Dean Foods and Hershey, warned last year that rising commodity costs would hit earnings. Analysts have speculated that food manufacturers could look to merge to reduce costs but Nooyi claimed that consolidation would not alleviate the problem of rising commodity costs.
“This is not about scale and taking out costs. It is about the behaviour of governments, of ethanol programmes,” Nooyi told The Times.
Nooyi added that there would not be a “transformational” deal for PepsiCo, which was last year linked with Nestle.
