Sorbent boss warns toilet paper prices will rise as gas bill set to almost triple

The boss of a major Australian toilet paper company has warned prices are about rise as the manufacturer’s gas bill is expected to almost triple.

The company behind Sorbent toilet paper – made in Melbourne and Sydney – has revealed its gas costs will almost triple next year and it means shoppers will be copping another price hike on an essential household item.

Solaris Paper’s contract with its current gas provider ends at the end of the year and chief executive Steve Nicholson said he was “absolutely amazed” to learn the best offer the company had for a new contract was going to be 290.7 per cent more expensive.

“Particularly in terms of the viability of our operation. This is an icon toilet paper you’re talking about,” he told Ben Fordham on 2GB on Monday. “We are one of the largest producers in this country of toilet paper and facial tissues.

“It’s a tremendous challenge for us.”

Mr Nicholson wouldn’t specify the dollar amount the company’s gas bill would be increasing by but said it was “many millions of dollars”.

“We don’t want to pass on these costs but we’re going to have to. We can’t absorb these costs. Not 300 per cent in gas, that’s only one of our costs,” he said.

Sorbent products have been manufactured in Australia since the early 1950s, and Mr Nicholson said many of the company’s workers in Melbourne had been there for 20 or 30 years.

“This is a real crisis looming up,” he said.

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Consumers will be paying more for toilet paper in the new year as energy costs soar. Picture: David Geraghty/NCA NewsWire

The revelation comes after Snack Brands Australia chief executive Paul Musgrave, who oversees brands like Cheezels, Kettle, CC’s and Thins, told the radio host last week his company’s gas bill had soared from roughly $3 million per year to $9 million.

Mr Musgrave said the 200 per cent increase meant consumers could expect a 30c to 50c increase in the price of its chips in the next year.

“Because gas prices are going up – and they’re a really significant price rise – but they’re not the only cost pressure business,” he said.

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

“(The rise is) going to look somewhere like 30 to 50 cents a bag of potato chips in the new year.”

Snack Brands Australia will also have to pass on the costs of its soaring gas bill.

He said about half of the price increase would be due to gas price increases which, according to Mr Musgrave, powers half of Snack Brands’ energy needs. The electricity bill has also gone from $2 million to $3 million per year.

Both Solaris Paper and Snack Brands Australia have operations in Federal Energy Minister Chris Bowen’s electorate in Sydney. Both bosses said they wanted an opportunity to speak to him about what is going on.

When Treasurer Jim Chalmers handed down his first budget in October, he warned Australians to brace for energy price hikes of up to 20 per cent.

Treasury estimated retail electricity prices would increase by 20 per cent nationally by the end of the year. In 2023-24, that figure is expected to blow out to 30 per cent.

Retail gas prices were also estimated to increase by up to 20 per cent in both 2022-23 and 2023-2024.

The budget said electricity prices were expected to directly contribute between 0.75 and 1 percentage point to inflation in 2022-23 and 2023-24.

The annual consumer price index inflation reached 7.3 per cent -- its highest in more than three decades -- in September.