Frozen geese cost twice as much from one day to the next – even though they were slaughtered months ago. Such cases are increasing, the price jumps in food are now exceeding general inflation. This is not always due to higher costs on the producer side. Consumer advocates criticize swarming behavior.
Veit Pöhlmann was recently shocked when he entered the wholesaler of the Edeka supermarket chain in Kulmbach, Bavaria. The innkeeper from Franconia wanted to buy frozen Polish geese for his business. But instead of 25 euros like the day before, they suddenly cost 50.34 euros per piece – plus VAT. Nothing had changed about the geese. As before, according to the label, they were slaughtered in November 2021, frozen in December 2021 and have a shelf life until 2024.
Pöhlmann told the curious story of the “Süddeutsche Zeitung”, which in turn asked Edeka why the price had more than doubled. The supermarket chain pointed to the rampant bird flu, which has reduced stocks, which is why all prices, including those for goods that have already been packaged, would be increased. In addition, “all relevant competitors” also increased their prices to a similar extent.
The example from Bavaria shows how difficult it is to control food price increases. “The pricing of food is highly non-transparent and speculative,” says the North Rhine-Westphalia Consumer Advice Center, for example. She randomly tested various foods and found horrendous price differences between individual supermarkets. A kilo of tomatoes cost between 1.11 and 22.17 euros, depending on the shop. “Such blatant price differences on the same day in different supermarkets cannot be explained solely by higher production costs, panic buying or the consequences of the Ukraine war,” says Wolfgang Schuldzinski, head of the North Rhine-Westphalia consumer advice center.
However, the suspicion is not only that individual black sheep among supermarkets are exploiting the generally high inflation for deadweight effects, i.e. increasing prices for no reason, but also that this is happening across the board. The logic behind this can be seen in the case of Edeka’s deep-frozen geese: If several competitors raise their prices, Edeka also sees this as a reason for raising its own prices – regardless of whether this is necessary in terms of its own costs.
Overall, food prices nationwide are rising significantly faster than the general inflation rate. While this was 10.4 percent in October, food went up 20.3 percent compared to the previous year. Since April, food prices have been decoupled from the general rate of inflation, and they are also rising faster here than in other countries across Europe.
There is reasonable evidence that groceries are increasing in price at all. Farmers are suffering from shortages or paying much more for mineral fertilizers made from natural gas than in previous years, passing on higher costs and lower yields to traders. Sunflower oil and rapeseed oil come mainly from the Ukraine, whose deliveries are now being canceled due to the war, driving up prices. As a by-product of oil production, high-quality animal feed is produced that cattle breeders now have to buy expensively elsewhere – so meat, milk and egg prices are also rising.
A problem in Germany: The food retail trade is in the hands of a few large companies. Edeka, Rewe, Aldi and the Schwarz Group, which includes Lidl and Kaufland, share 85 percent of the food market. That reduces competition. In addition, it is more difficult for consumers in the food sector to quickly compare prices. If you stand in front of a bottle of sunflower oil for 2.50 euros in your Rewe, it is usually too cumbersome to run to the nearest supermarket and see if the oil is cheaper there.
Consumer advocates have therefore been demanding for months that the powers of the Federal Cartel Office be expanded. The market transparency office based there is to receive the specific prices from all food retailers on a daily basis. A similar process already exists at gas stations. The advantage: Private providers can use the data to build price comparison apps, for example.
Neither the supermarket chains nor the large manufacturers would have to starve if food prices fell again. According to the Gesellschaft für Verbraucherforschung (GfK), the sales of the discounters rose by 20 percent in September alone compared to the previous year. Nestlé expects sales to increase by 9 percent and pre-tax profit by 7.5 percent this year. At Unilever, profit is expected to stagnate at 11.3 billion euros, but sales will increase by 13 percent. The US giants Mondelez, Mars and PepsiCo are also expecting gains.
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