AVI says rooibos input costs and selling prices are at record highs. In the first half of the group’s financial year, raw material costs increased by R61m, or about 70%, and selling prices in the category spiked 40% as a result. Rooibos can be cultivated only in the Cederberg in the Western Cape and the drought has resulted in many plantations dying. Industry players estimate there is a supply shortage of between 25% and 30%, so producer prices have soared. AVI CEO Simon Crutchley said there had been some volume pressure in the tea category as a whole. "The important thing is that our brands performed well. Overall demand has been resilient," said Crutchley. "We are seeing a little bit of drifting by some consumers who are under pressure and some of them are buying down to Trinco from Five Roses … so there’s nothing obviously alarming, but I guess [it is] inevitable in this environment." He said the outlook for input costs for the rest of the year was not promising. "Once the raw ma...

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