VeggiePets.com has not changed any prices since September 2006, yet since that time a number of factors have increased the cost of goods we sell. So prices have had to rise, although they are still at or below the manufacturers RRPs.

In a nutshell, increased costs of raw materials, fuel and changes in the exchange rate have squeezed us throughout 2007 and we have resisted changes for as long as we could. However, some of these costs now seem unlikely to reduce in the foreseeable future so to keep VeggiePets.com a viable business we need to make some price corrections.

For more details on what has been happening you can read the information below that details the main factors for the increase in prices with references from other sources at the bottom of this page.

Commodities
Cereal prices rose dramatically in 2007*, to their highest levels in a decade, raising the cost of raw ingredients for all our manufacturers. As wheat, soya and corn are important protein sources in vegetarian foods this had an immediate impact. Initially, we hoped that this situation might correct itself but as the year continued it became clear that the prices would remain high but we absorbed the increases and waited optimistically.

The Euro
Additionally, we have been affected by the dramatic changes in the exchange rate with the Euro towards the end of 2007. The Euro currently (28-01-2008) worth around €0.75. This is a substantial change from €0.67 when we started VeggiePets.com in 2003 and changed very little until 2007. This has resulted in an almost 12% increase in the cost of goods produced in the Euro zone.**

Oil Prices & Fuel Taxation
In addition to the factors outlined above, the cost of oil has also raised transport costs since 2003. Oil went from around $30 a barrel in 2004 to just over three times that price at more than $90 a barrel in recent weeks. This has had a knock on effect on the cost of petrol and diesel, which compounded by around 80% tax on fuels**** has made the costs of getting goods to us and then to you more expensive.

(It is worth noting here that the fact we buy such enormous quantities of stock means we do keep individual customers road miles down to a minimum.)

Increased operating costs
The last factor that has forced us to implement these pricing corrections now has been the rapid growth of VeggiePets.com and its parent company Vegeco Ltd. We have been making investments in developing new services, and expanding our import and export operations. To do so has meant working very long hours, often seven days a week and now that we have grown we need staff to support us. While we were happy to work harder, and longer to absorb the accumulating costs described above, we cannot expect our staff to make similar sacrifices to keep pricing unrealistically low.

Conclusions
You may have heard the phrase ‘You can have it Good, Fast or Cheap – pick any two!’. That may seem simplistic, but it is based on factors that we face each day.

We want to offer our customers a quality, fast and reliable service. We want to build a company that is ethical, collaborative and entrepreneurial and has the power to change things for vegetarians and vegans. We want our products to be high quality, affordable and available. We want our service to be reliable, personal and enjoyable.

We simply cannot achieve those goals if we under staff our office and warehouse, overstretch the staff we have and work in poorly equipped facilities.

While cheap is always nice when you can have it, what our customers always tell us they need is:

Good (quality products, responsive staff) and;
Fast (reliable service, quick dispatch, on time deliveries)

We view our customers as supporters and to some degree, investors so we are never frivolous with the money they spend with us, we work it back into developing our projects. We do everything we can to bring them more choice and to make ethical options for them and their companion animals as easy as possible.

So while these price rises may be uncomfortable, they are unavoidable. Where we can reduce prices, we will (in fact World's Best Cat Litter 3kg is now 10% cheaper after these corrections). We want you to be sure that we are taking your support and investment in our work seriously and promise to return it with a growing selection of quality products and services.

External References

* In 2007 wheat rose in price by 90%, soya by 80% and corn by 20%.
Source: http://www.alertnet.org/thenews/newsdesk/N26348203.htm

** EURO/GBP exchange rate
Charts http://uk.finance.yahoo.com/q/bc?s=GBPEUR=X&t=5y&l=on&z=m&q=l&c=

*** Fuel prices since September 2003 - AA Fuel Price Archive
Source: http://www.theaa.com/motoring_advice/fuel/fuel-price-archive.html
Current prices: http://www.theaa.com/motoring_advice/fuel/index.html

**** Fuel Duty information
http://www.petrolprices.com/fuel-tax.html