The boss of one of Scotland’s top shortbread firms says his profit is being left at the mercy of rising dairy prices.
Dean’s of Huntly made £752,642 for the year to June 2013, according to accounts lodged yesterday – a significant rise from 2012’s £556,694.
But last night managing director Bill Dean told the Press and Journal that huge fluctuations in the price of butter could impact on its bottom line this year.
He said the peaks and troughs – which can add up to £1,000 to the cost per tonne in a matter of weeks – was making it very difficult to plan future investment.
“We are a smallish business, but we still use 40 tonnes of butter a year,” he said.
“When you are using as much as we do, it can have a major impact on your bottom line. It can write-off between £350,000 and £500,000 a year – and you can’t plan for that.
“One commodity should not be allowed to have such an impact on a business.”
Walkers Shortbread made a similar warning just a few months ago.
Joint managing director Jim Walker said the resurgent pound and rising dairy prices made 2013 “tricky”.
Mr Dean said manufacturers like Dean’s are having to absorb the costs.
“We can try putting prices up, but it is just impossible in this climate; nobody wants to pay more,” he said.
“We have had to walk away from some business because there is no money to be made.”
Mr Dean added: “In a matter of weeks it can rise from £3,000 a tonne to £3,800 a tonne, which can have a devastating effect.
“We just want a bit of stability.
“It is difficult to plan investment when one commodity is dictating what you can and can’t do.”
Turnover at Dean’s was £7,259,929 in 2013, up from just over £7million the previous year.
During the year the firm invested heavily in improving facilities for staff.
The firm also paid £162,000 in taxes to local and national government.
“We made profit, but we put a lot more back,” Mr Dean said.
He said that despite raw material costs, the firm is “confident of future growth and prosperity”.