UPDATE 1-General Mills expects price increases to stick

* Prices up 8-10 pct, costs up 25 pct over past five years

* Sees commodity costs up 4-5 pct annually after recession

By Brad Dorfman

BOCA RATON, Fla., Feb 17 (Reuters) - General Mills Inc (GIS.N) expects to be able to hold onto price increases it took in recent months as commodity costs soared, CEO Ken Powell said.

"We expect to hold these as we go forward," Powell said during a media briefing Tuesday following the company's presentation at the Consumer Analyst Group of New York conference in Boca Raton, Florida.

Powell said General Mills has dealt with most of the soaring costs for energy, grains and other commodities in recent years by improving productivity rather than by raising prices.

Over the past five years, commodity costs are up about 25 percent, while the company has raised prices 8 percent to 10 percent, depending on category, he said.

Powell said that when the current recession ends, he expects commodity cost increases will return to the annual rate of 4 percent to 5 percent seen earlier this decade.

Despite the recession, consumers are still willing to pay a premium for brand-name products they like, General Mills executives said. Retailers are also willing to accept the higher prices, which also mean more profit, if they can see that a brand offers advantages over a lower-priced store brand.

Powell said he expects the food industry to now return to its normal practice of growing sales through increased volume rather than through price increases. But he also said General Mills had been able to increase prices regularly even before commodity costs soared over the past few years.

Consumers are seeking out lower-priced brands, like Hamburger Helper, to save money, but General Mills is also seeing strong sales in its Macaroni Grill pasta mixes, which cost more but give consumers more of a restaurant-quality taste, Chief Financial Officer Don Mulligan said. (Reporting by Brad Dorfman; editing by John Wallace)