The rise in raw materials, transport and energy worries manufacturers and distributors
The triple cost crisis (rising prices of raw materials, energy and transport) has already stressed the shopping basket, the last link in the supply chain. In the prices of some products this increase is already noticeable and that it spreads seems inevitable, despite the fact that manufacturers and distributors try to adjust margins so that the consumer does not appreciate it, especially at the gates of the Christmas campaign, key in spending .
There is increasing tension because this rise in raw materials is transferred to the final price and this uncertainty is already perceived in households, explains Bernardo Rodilla, director of commerce at the consulting firm Kantar Worldpanel, who yesterday presented figures on the evolution of mass consumption in Spain.
According to your data, there are more than 13 million households that state they are concerned that this rising cost (raw materials, transport and energy) is transferred to your pockets. So far this has been reflected, rather than a price war between distributors, in their containment, explains the expert.
The CEO of the multinational food company Kraft Heinz (Orlando, Kraft …), the Portuguese Miguel Patricio, has acknowledged in an interview with the BBC that the group is already raising prices in the US, its main market, and in other countries and that you have to get used to food being more expensive.
Some of the large food manufacturers consulted by EL MUNDO (Danone, Nestl, Pepsico or Ebro Foods, among others) they remain on the sidelines of a debate that is considered almost tab, because the consumer is very sensitive to the price, and more at the moment, explain sources in the sector. Although sooner or later these costs will have to be passed on, they admit in a large food company.
From Kantar they consider that this uncertainty in prices has already caused a growth in the share of the supermarket’s own brand and also in promotions, which return to the rhythms prior to the pandemic.
This inflation is generalized. The food price index of the FAO (the United Nations agency for Food and Agriculture) rose 32.8% in September compared to the same month last year, with oils and cereals being the main responsible for the increases. . In Spain, electricity and gasoline shot up the consumer price index (CPI) by 4% in September, according to data published yesterday by the INE. Climbing energy affects the shopping basket because it means that the manufacturers of the products and the supermarkets that sell them have to pay much more by the light they consume.
Oils and fats accumulate a rise of 20% So far this year, the increase is 4% in eggs, almost the same in the case of fresh fruits and close to 3% in some meats. It is true that, as a whole, food prices remain relatively stable compared to last year, but because that was when the greatest increases were registered.
In the case of cereals and oils, it is the drop in production in the main producing countries that has triggered their price. The same happens with wine. There is 15% less harvest in Spain and 30% less in France and this raises prices. Part of the collapse in transportation is compounded by a skyrocketing over-demand at a time when factories, with fewer staff and production capacity reduced by anti-Covid measures, have not yet caught up and have become saturated.
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George is Digismak’s reported cum editor with 13 years of experience in Journalism