First power bills, now chips & loo roll: The price hikes to look out for in 2023

Just when they thought the bite of bigger home power bills was painful enough, Australians have been warned to brace for another hit where it hurts – price rises in the products plenty would consider staples. That is, toilet paper and potato chips. 

The bosses of two major Aussie manufacturers have said they’ll be forced to pass the soaring cost of powering their factories with gas onto consumers in 2023. 

Even then, one said the cost of gas had brought into question plans to expand its 70-year-old business, while the other explained that relying on renewable energy sources was untenable because it would take 250 acres of solar panels to power its factory for just six hours a day.

Gas, corn and potato prices leave a bad taste

Paul Musgrave, the CEO of Snackbrands, which produces brands including Cheezels, CC’s, Kettle, Thins, Samboy and French Fries, told 2GB host Ben Fordham that the company’s gas bill had effectively tripled after its gas wholesaler, Weston Energy, was suspended from doing business earlier this year. 

“We had a contract with a long-term retailer for energy supply at $8.60 a gigajoule and they went bust because of the rising prices … our price went to $45 a gigajoule so we just had to suck it up straight away,” Mr Musgrave said.

He said powering Snackbrands’ factories in Sydney’s Smithfield and Blacktown, where it employs 600 workers, was set to cost $9 million a year.

Mr Musgrave added that while half of Snackbrands’ electricity was supplied by a long-term solar deal, using solar energy to entirely supply his factories’ power needs wasn’t feasible.

“We’d need 250 acres of solar panels to supply potentially enough energy to run for six hours a day or even less if it’s a cloudy day,” he said. “We really believe in renewables but it’s just not practical for the high energy demands that only gas can fulfil for our business.”

Mr Musgrave said passing the price rise, in the form of a 30 cent to 50 cent increase in the cost of a packet of chips, onto consumers was unavoidable. 

“Realistically, that’s the only option we’ve got because while gas prices are going up, and they’re a really significant price rise, they’re not the only cost pressure businesses have and I don’t think I’m the only one noticing that,” he said.

“We’re going to have to take a price rise early in the new year to cover primarily the cost of gas and also the agricultural products that we buy, like corn and potatoes, because all those things have skyrocketed as well.”

TP icon kicks up a stink about gas prices

Meanwhile, Steve Nicholson, acting CEO of Solaris Paper, which makes Sorbent, Handee Ultra Kitchen Towel and Deeko Serviettes, told 2GB the price of Sorbent was likely to rise in the coming year on the back of a 290 per cent increase in the company’s gas bill. 

Describing the amount Sorbent would have to fork out for gas to power its main factory in Melbourne and smaller facility in Sydney as “many millions of dollars”, Mr Nicholson explained that the company’s current gas contract was coming to an end and the massive increase was the best new price it could get in the current energy market.

This posed an immense challenge to an iconic brand that employed 300 people, he added. 

“Sorbent [has] been in the country for 70 years, since the early ‘50s, and a lot of our workers in Melbourne have been with us for 20 to 30 years, so forgive me if I sound a little bit passionate about it, but this is a real crisis looming,” Mr Nicholson told 2GB.

“We don’t want to pass on these costs but we’re going to have to. We can’t absorb these costs – 300% more on gas, and that’s only one of our costs.” 

Mr Nicholson added that the company had assigned capital to expand its business in Australia but those plans had been put on hold until it had a clearer picture of the direction of the energy market, noting that the rising price of power had a direct impact on the viability of the business.

Albanese considers gas price cap

The now-Labor Government campaigned for the federal election on a commitment to lowering residential and business power bills by $275 by 2025. But announcing its Federal Budget in October, the Treasury forecast gas prices would increase by 20 per cent over the next two years, while electricity prices would jump by a further 20 per cent on average before the end of 2022 and a further 30 per cent in 2023-24.

Following 2GB’s interviews with Snackbrands and Sorbent, Prime Minister Anthony Albanese told the radio station that the government was considering introducing a price cap on gas. And he doubled down on the government’s support for a shift to renewable energy sources.

Experts have said Russia’s war with Ukraine and the resulting sanctions on Russian exports, including gas, was a key contributor to soaring gas prices, as was the export of Australian gas to the international market. Meanwhile, electricity prices have been impacted by outages at coal-fired power stations and the costs being incurred by energy companies in replacing the use of coal with renewables.

Savvy tips for saving on energy and more

With groceries, fuel and energy prices rising, many Aussie households are feeling the pinch, especially with the festive season just around the corner. If you’re on the hunt to shave down some of your household bills, we’ve got some ideas that could help maximise your savings.

1. Take advantage of rewards programs

It’s rare these days that a company, be it shopping, utilities or otherwise, won’t offer its own or a partner’s rewards program. These programs offer a variety of discounts on items such as groceries, fuel, entertainment and dining. They can be a great way to increase the benefits you receive from a service you’re already paying for.  For example, Origin Energy customers can save up to 12c a litre on fuel if they also shop at Woolworths and use an EG Fuel station. 

Check with your providers to ensure there isn’t a rewards program you are missing out on as part of your service. 

2. Compare prices regularly

The cheapest deal today may not be the cheapest deal tomorrow. Given the current climate, it’s likely that gas prices will continue to fluctuate. Having a look every couple of weeks will help to ensure you are still receiving the best possible price. For example, Canstar Blue regularly updates its information on the cheapest electricity plans available in New South Wales, Victoria, south-east Queensland and South Australia.

The same goes for your weekly grocery shop or visit to the servo. It may pay to shop around; for example, ALDI claims families can save up to $2,468 a year by switching to its chain, while Woolworths has introduced a price cap on essential groceries. 

Compare Cheap Electricity Deals

Could you be saving more? If you can’t remember the last time you compared energy prices, then there is a good chance you could be paying more than you need to for power. Below we have listed some of the cheapest electricity plans currently on offer in Sydney, Melbourne, Brisbane and Adelaide so you can compare. 

3. Check your eligibility for concessions or discounts

Most state and territory governments offer concessions and discounts to help vulnerable or low-income households manage bills ranging from electricity and natural gas to water. Yet recent research found that as many as four in 10 eligible Australians aren’t taking advantage of available energy rebates. Information on local concessions can be found on your state or territory’s government website.

If you’re struggling with a particular utility cost, such as your electricity, internet or phone plan, it’s usually wise to reach out to your provider as soon as possible to find out what payment options they offer. 

We’ve listed our top guides below on getting financial assistance from your utilities provider. If you are in a significant financial crisis however, it is best to reach out to your provider directly and discuss your options. 

• What happens if I can’t pay my phone bill?
• What to do if you can’t afford your energy bill?
• Energy Hardship Policies Explained 

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