The company behind Sorbent toilet paper, made in Melbourne and Sydney, has revealed its petrol costs will almost triple next year and means shoppers will pay another price hike for an essential household item.
Solaris Paper’s contract with its current gas supplier expires at the end of the year and chief executive Steve Nicholson said he was “absolutely stunned” to learn the company’s best offer for a new contract was to be 290.7 per cent more expensive
“Especially in terms of the viability of our operation. This is an icon of toilet paper you’re talking about,” he told Ben Fordham on 2GB on Monday. “We’re one of the largest producers in this country of toilet paper and facial tissues.
“It’s a tremendous challenge for us.”
Nicholson declined to specify the dollar amount that would increase the company’s gas bill, but said it was “many billions of dollars.”
“We don’t want to pass these costs on, but we will have to.” We cannot absorb these costs. Not 300 percent on gas, that’s just one of our costs,” he said.
Absorbent products have been manufactured in Australia since the early 1950s, and Mr. Nicholson said many of the company’s workers in Melbourne had been there for 20 or 30 years.
“This is a real looming crisis,” he said.
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The revelation comes after Snack Brands Australia chief executive Paul Musgrave, who oversees brands such as Cheezels, Kettle, CC’s and Thins, told the radio host last week that his company’s gas bill had soared from about 3 million dollars a year to $9 million.
Mr Musgrave said the 200 per cent increase meant consumers could expect a 30 cent to 50 cent increase in the price of their chips next year.
“Because gas prices are going up — and they’re a really significant price increase — but they’re not the only cost pressure business,” he said.
“So we will have to raise the price at the beginning of the new year to cover the cost of gas and also the agricultural products that we buy – like corn and potatoes – because all those things have shot up as well.
“(The increase is) going to look like 30 to 50 cents a bag of chips in the new year.”
He said about half of the price increase will be due to the increase in the price of gas, which Musgrave says fuels half of Snack Brands’ energy needs. The electric bill also went from $2 million to $3 million a year.
Both Solaris Paper and Snack Brands Australia have operations in federal Energy Minister Chris Bowen’s Sydney electorate. Both bosses said they wanted a chance to talk to him about what’s going on.
When Treasurer Jim Chalmers delivered his first budget in October, he warned Australians to brace for energy price hikes of up to 20 per cent.
The Treasury estimated that retail electricity prices would rise by 20 per cent nationally by the end of the year. By 2023-2024, that figure is expected to reach 30 percent.
Retail gas prices were also estimated to rise by up to 20 per cent in both 2022-23 and 2023-24.
The budget said electricity prices were expected to directly contribute between 0.75 and 1 percentage point to inflation in 2022-23 and 2023-24.
Annual consumer price index inflation hit 7.3 percent — the highest in more than three decades — in September.
Originally published as Sorbent boss warns toilet paper prices to rise as gas bill nearly triples