Dusseldorf The prices for agricultural commodities continued to rise in September. The food price index of the World Food Organization (FAO) rose by a further 1.2 percent to 130 points compared to August. This is more than 30 percent higher than in September 2020 – and only just below the all-time high from 2011.
That should drive the already higher prices for groceries in the supermarket upwards soon. Because at the moment there are talks between dealers and brand manufacturers about future purchasing conditions. And almost all manufacturers are pushing for price increases.
That is exactly what threatens to happen now. In the industry there is talk of very controversial discussions between manufacturers and dealers. It is already foreseeable that there will soon be gaps on the shelves again, because either producers stop delivering or retailers list certain brands as a means of pressure in the negotiations.
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Edeka boss Markus Mosa has already criticized the manufacturers with harsh words at the industry conference MLF, as the “Lebensmittel-Zeitung” reported. So he cursed there about “unjustified” demands for price increases with which brand manufacturers Edeka had confronted.
High wheat prices could make pasta more expensive
And they have it all, as Mosa demonstrated with numerous examples. This is how Dr. Oetker asked for a price premium of 8.9 percent, Maggi even 15.7 percent. The demands for pasta are said to be particularly severe, with 19.3 percent for Birkel and 25.1 percent for Buitoni. As a matter of principle, the manufacturers do not comment on the negotiations with the dealers.
An Edeka spokesman announced that the company could not comment on the status of the discussions with individual suppliers. But he emphasized: “The market-dominating manufacturers are increasingly confronting us with demands for price increases, and as a means of pressure they sometimes use delivery stops.” Many of these demands cannot be understood with a view to the actual development of raw material prices.
How high the price shock will actually be and which products it will hit is still open. But one thing is clear: “At least part of the increased procurement costs must be passed on to the customer,” emphasizes the expert Kecskes. Otherwise the business of the manufacturers and dealers would no longer be profitable in the long term.
Price increases for pasta, for example, would be consistent, as the price of wheat has risen significantly in recent months. A year ago the FAO index for wheat was 104, this September it was 132.5. That is an increase of 27.3 percent.
This will have an impact on the supermarket checkout. Price is a sensitive issue for retailers and they are reluctant to comment on it. But Aldi, for example, is already carefully preparing customers for price increases.
There is a risk of gaps on the shelves
“Food prices basically follow the principle of supply and demand on the raw material markets,” an Aldi spokesman recently told Handelsblatt when asked. Wherever possible, the retailer passes on savings in purchasing to the customer. “On the other hand, it is also sometimes unavoidable to adjust product prices upwards when market prices change.”
GfK expert Kecskes also expects tough negotiations. The manufacturers would go into the annual talks with the demand for price increases, the dealers wanted to avoid that as far as possible.
The reason: The sales increases of the past year would not be repeated. “Compared to 2020, sales in the grocery trade will stagnate or even decline, especially in the second half of the year,” Kecskes expects. “Price increases could intensify that.”
Edeka boss Mosa strikes the hardest notes. He speaks of “annual price increase claims independent of raw material price developments”, which made the basis for the negotiation difficult. “The promise of a justified price increase is easier if, in the event of declining price developments, price reductions also become a matter of course,” Mosa recently told the Handelsblatt.
This also suggests little good for consumers. In the coming weeks, you can expect that your favorite products will not be available in some stores – and may soon get more expensive too.
More: Expensive raw materials, high freight costs: Experts expect significantly higher prices in the supermarket