Supermarkets, “20% price increases”: which products are skyrocketing


Supermarkets, “20% price increases”: which products are skyrocketing
Written by aquitodovale

Attilio Barbieri

Inflation at 8% is likely to be just the starter of what awaits us this fall. The flurry of increases that hit food goods has only partially been discharged on sales prices: up to now, the supply chains have absorbed a substantial part of the increases. But they can’t take it anymore: it’s just a matter of time but we expect a further jump of 20%, even if no one has the courage to admit it. “The feeling is that there is an underestimation of the clouds that gather on the horizon”, he tells Free Luigi Scordamaglia, managing director of Filiera Italia, “on a global level there has been an average increase in the prices of agricultural products of 23%, with some values ​​well above that continue to cause concern both in the over 50 countries at risk of famine, and on markets such as the Italian one where the increase in production costs negatively affects the ability of agricultural businesses to continue producing – and in fact one in ten closes – while one in four food companies is drastically cutting production. On the other hand, with the cost of gas at 175 euros per megawatt hour, the increase in raw materials, the increase in the cost of cardboard which has made + 85% in recent months after having doubled last year and with food carbon dioxide which there is little to do. Companies are struggling to move forward ».

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What has happened so far?
«The most fortunate production companies managed to obtain increases of up to 25%, however insufficient to compensate for the higher costs incurred. Increases that many distribution chains have so far partially absorbed without downloading them on shelf prices, fearing a collapse in sales volumes. But now the chains can’t take it anymore … ».

And so?
«In September, even large retailers will be forced to pass these increases on to final prices.
And there will be a further surge in basic necessities ».

In what order of magnitude are we?
«In Italy, our agri-food companies have production costs that have grown mainly driven by energy, by 25-30%. Today, food inflation is between 8 and 10%. There is a 20% gap that has yet to arrive ».

A very heavy blow …
“No doubt. Especially for families who dedicate the largest share of their budget to buying food and energy ».

Are there any alternatives?
“No. If these cost increases were not to be discharged into the market, there would be a barrage of closures between the production companies, within the supply chains. There is no alternative. Among other things, we are talking about price increases that are barely sufficient to equalize production costs. Nobody would get rich. Not even the good part of large-scale distribution, which for the first few months kept the increases in their bellies so as not to drastically lower sales volumes. But now he can’t do it any more ».

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How does it come out?
«The only solution is to get more money into people’s pockets by cutting the tax wedge, even all in favor of the workers. And at the same time by lowering or completely canceling the VAT on basic necessities.
I don’t see other options ».

At the political level, is there a perception of how critical the situation can become in a few months?
“If at the Italian level there is perhaps inadequate attention to these phenomena, at the European level it is even worse”.

What do you mean?
«The ideological transition based on productive abandonment continues to weigh on agri-food. Beyond the declarations, we continue with a CAP and a Farm to Fork strategy still unchanged compared to the decrease in production recorded. The 200,000 hectares cultivated are of little use because the derogation lasts only a few months. And the obligations of crop rotation all remain in force … ».

A bleak picture …

«In European politics there does not seem to be a perception of the gravity of the phenomena in progress. Among other things, the climate crisis with the drop in rainfall that has also affected Eastern Europe, will reduce the yields of new cereal crops by up to 30%. There will be a shortage on the market far greater than that caused by the Russian invasion of Ukraine. A drop in yield that will push prices up further. And a lot. A scenario that would foreshadow far more drastic measures than those that we timidly try to take. While there is a complete lack of community solidarity that leads to a real sharing of consequences and sacrifices “.

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