Butter for three euros, minced meat for five euros: food prices are rising and rising. The Ukraine war and the high energy costs are not the only reasons. Producers are also being pressured by the big grocery chains.
Butter, cheese and baby milk have become so expensive that many shops in the UK put security tags on them to deter theft. Basic groceries are increasingly being stolen from British supermarkets. After all, butter now costs around six euros in Great Britain.
In Germany, too, prices are rising rapidly. It is true that in this country it is still far below the British level, but a piece of butter for three euros is not uncommon. We also have to pay significantly more for oil, coffee or milk.
However, this has not only been the case since the start of the Ukraine war. "We have had a slightly above-average price increase for a very long time, at least ten years," says Stefanie Sabet, Managing Director of the Federal Association of the German Food Industry in the ntv podcast "Learned again". The corona pandemic and the war would have caused prices to skyrocket. "The exceptional situation in the supply chains was not on anyone's agenda."
Within a year, groceries have become almost 13 percent more expensive in June. In particular, cooking oil, meat, bread, dairy products and eggs cost a lot more than they did a year ago. Oil has become more expensive by over 40 percent.
The fact that food costs more is also due to Russia's attack on Ukraine, but not only. The war made the situation even worse. But many other factors come into play.
Manufacturers currently have to spend a lot more themselves to be able to produce. Energy has also become more expensive for them. Milk and meat production in particular are dependent on gas, says Stefanie Sabet. "In the long term, we have cost increases due to ever-increasing demands in production and generation. On the one hand, this has to do with the demands of consumers, but also with the conversion of agriculture and production towards climate goals." The corona pandemic has caused shortages in many raw materials and packaging.
Due to the war, there is a shortage of sunflower oil and grain in particular. Ukraine is the largest sunflower oil supplier in the world. The country is also one of the world's largest exporters of grain. Since the beginning of the war, however, the country has only been able to sell a fraction of the harvest to other countries because Russia does not allow cargo ships through the Black Sea. In addition, India is no longer exporting wheat due to the heat wave in the country.
Grain has become scarce. The grain price has gone up. Also with us. "We are almost self-sufficient when it comes to bread grain in Germany. We are not dependent on imports. But the world market price has of course increased because there was less available on the world market because the Ukraine was absent," explains Stefanie Sabet. The German grain prices are also based on the world market.
A survey by the ifo Institute has revealed that food prices will continue to rise in the coming months. Almost every food and luxury food retailer surveyed is therefore planning higher prices.
A surcharge of 10 to 20 percent could soon come for bread and rolls. This is what the Lieken Bakery, the second largest wholesale baker in Germany, expects. The company had to pay double the purchase price for flour this year. And also pay more for natural gas, packaging materials and staff. The Schleswig-Holstein farmers' association even expects the price of bread to double. Bread and rolls were 12.5 percent more expensive in June compared to the same month last year.
Stefanie Sabet also expects even juicier prices than now. But that's not the fault of the manufacturers. "The costs will definitely increase. I can tell you that for sure. But I can't tell you what the trade will do with it." Retailers raise or lower prices on their own.
The prices that we see on the receipt at the end of the supermarket do not reflect the actual costs. The manufacturers do not add all the additional costs to the price. Although, like consumers, they have significantly higher gas and electricity bills. Added to this are the additional costs for staff and packaging, for example.
"The cost increases are easily in the double-digit range, if they haven't even doubled or tripled. We don't see such price increases at the end consumer level. Of course, attempts are made to cushion that," explains Sabet in the podcast.
The big grocers ultimately determine the prices. Four large corporations share three quarters of the market. Edeka with the Netto supermarkets, Rewe with Penny, the Schwarz Group, which includes Lidl and Kaufland, and Aldi. Manufacturers have to negotiate prices with them. These are binding for a certain period of time.
When negotiating with the producers, the dealers don't let their cards be looked at, says Stefanie Sabet. "We have tough negotiations with the retail trade, who ultimately sell the food to the end consumer. What just can't be passed on is at the expense of growers and producers' earnings. To a certain extent, companies can tolerate that, to a certain extent but not economically anymore."
Rising food prices are a particular burden for pensioners, single parents and low-income families. The rush at the food distribution points of the Tafel in Germany is higher than ever. Among other things, the social association VdK and the consumer advice center are therefore calling for the VAT on certain staple foods to be temporarily abolished, for fruit, vegetables and legumes.
Stefanie Sabet doesn't think that's a good idea. That would cause more costs than savings, because companies would have to completely rebuild their systems. It would be more important to be able to plan the energy supply. "We need at least clear statements about what our sector can and cannot count on. Where we are in the gas supply chain," demands Sabet. In order to reduce costs, a sufficient supply on the agricultural commodity markets would also be important.
Food is not only expensive in Germany: Many people will now notice on holiday abroad that they spend a lot more on food there. Prices have risen sharply, especially in the eastern EU countries. At the top of the list is Lithuania: In April, food prices there increased by almost a quarter compared to the previous year. Prices have also risen sharply in Greece and Spain. In Italy and France, prices have also risen, but not as much as in Germany.
