Sara Lee raises bread prices as wheat costs rise

 
 
Published: 12/14/2007 12:29 AM

Sara Lee Corp., the maker of Ball Park hot dogs and its namesake frozen pies, is raising bread prices in North America for the second time since September to counter higher wheat costs.

"We increased prices by 5 percent in September and we are doing it again at this moment," said Sara Lee Chief Financial Officer Theo de Kool, 54. He declined to say how much Sara Lee is raising prices this time.

"I haven't seen adverse effect on volumes," he said.

Sara Lee's latest price increase for bakery products will take effect in the quarter starting next month, de Kool said. The cost of wheat has doubled in the past year, he said.

Last month, the Downers Grove-based company reported a 40 percent drop in profit for the quarter ended Sept. 29, citing higher costs for wheat and coffee and a year-earlier tax gain. The foodmaker said then it expects price increases to equal higher costs during the nine months through June.

Sara Lee hasn't been able to "fully" compensate for higher prices in its retail meats business, the largest North American division by sales. Some of its competitors "haven't raised their prices so that restrains us, too," de Kool said. "We have said to our North American businesses, you have to increase your margins."