Milling company PannonMill is raising prices by 10% from February 1 because of higher input costs, chairman-CEO Zoltan Poor said on Tuesday.

Mr Poor said the company was forced to raise flour prices by 10% because of the weak forint, the higher VAT rate, a 2.7% average increase in electricity prices across the country and record-high vehicle fuel prices, Mr Poor said.

The rising central bank base rate raises interest expenditure and wage compensation, requiring employers to raise wages to prevent a fall in net wages in the lower wage categories, as the higher taxation of in-kind compensation to employees also adds to costs.

PannonMill Malomipari closed its business year ended September 30 with net revenue of HUF 19.1bn, well over the HUF 11.5bn in the previous year because of higher wheat prices, Mr Poor said earlier.

PannonMill can mill 300,000 tonnes a year, or about 25% of the market, making it the industry’s biggest player. It has four mills.