The France-based subsidiary of Dutch company Vion says that rising production costs have forced its hand and it has no other choice but to pass these costs on to its customers, with immediate effect.
Although she declined to give precise figures for the price increases, company spokesperson Caroline Brochard-Garnier said that no long-term negative implications were foreseen. She told FoodNavigator.com: “Such news is never pleasant to announce, but we believe our customers understand the situation. We do not feel that it will affect our business or our relationship with our customers.”
Costs will rise worldwide, although Brochard-Garnier told FoodNavigator.com that the amount will vary depending on the particular raw material in question. Rousselot uses the skin and bones of pigs, bovines and fish to produce its gelatin and hydrolysed collagen.
The cost of these materials is understood to have risen partly as a result of animal feed becoming more expensive. Over the last year grain prices have been affected by a number of factors such as poor harvests and competition for its use by biofuel industries.
Moreover, energy and transportation costs faced at all levels of pre-production, from farmers through to slaughterhouses, are passed on to Rousselot.
The company also says that high demand for its products in Asia and Eastern Europe has left something of a deficit in world markets. Rousselot recently expanded its business into China with the purchase of three production plants there between 2004 and 2007.
“The Rousselot Group has undertaken continued efforts to internally compensate this situation but can no longer absorb such dramatic cost increases,” said Laurent Weber, vice-president of sales and marketing.
“This new pricing is key to maintaining a viable business and service to our customers. In this demanding situation, our worldwide teams are committed to supply our customers with the best level of quality, technical support and service,” he added.
The news comes in the wake of a similar announcement earlier this month by the German Gelita group, with whom Rousselot shares joint leadership of the gelatin market, according to a recent market report from Leatherhead Food International.