GMs: Food inflation is bad for business

General managers from around the region have spoken out about the challenges facing their food and beverage outlets as a result of international food cost hikes.
GMs: Food inflation is bad for business
By Sarah Gain
Wed 04 Jun 2008 04:00 AM

General managers from around the region have spoken out about the challenges facing their food and beverage outlets as a result of international food cost hikes.

Oil prices, bio-fuels, reduced rice exports and poor harvests are all being blamed for the rising prices of staple foods such as rice, corn and wheat.

The Middle East's massive reliance on food imports means there is no escape from inflated food prices said general manager of the Four Seasons Hotel Doha Simon Casson.

"Rising food costs are a great concern. Just this morning I got a message on my Blackberry from the chef telling me that the price of rice had gone up 28%."

The property had attempted to deal with the issue by guaranteeing purchases with its suppliers, but other elements were beyond the hotel's control Casson said.

"There is inflationary pressure within the Gulf, such as the weak Dollar when purchasing, and it's not just the hotel's restaurants that are affected - feeding 600 employees three meals a day means that rising costs have a real impact," he added.

Similar issues were afflicting the Four Seasons Hotel Alexandria at San Stefano in Egypt said GM Stephan Killinger.

"Firstly, there are the imported items - a lot of the items that come from Europe are so expensive because of strength of the Euro.

"The second thing is that we are trying not to raise our prices right now, because we are catering to a local market that is still being educated about quality, so that is coming out of our profits," he said.

The issue was less of a problem in Jordan at present said general manager of the Four Seasons Hotel Amman Gerhard Stutz.

"People in Jordan are not willing yet to pay a particularly high price for food but the F&B prices in Amman have not risen too much in the last couple of years - there's room for the prices to increase and people understand that."

While the hotel had raised its menu prices to reflect the fact that meat, grain, flour and other basics were becoming more expensive, Stutz said he was confident that customers would be able to absorb the increase.

"I don't think there will come a point where the customer won't accept any more price increases - we are an international hotel and we provide a certain standard and a certain quality of food and service, and there are costs that are associated with that," he concluded.

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