Dusseldorf Where else the bottles with sunflower oil are, there is a gaping emptiness on the shelves of Edeka in Duisburg-Huckingen. Other retailers such as Aldi Süd have already limited the tax: Each customer can only buy four bottles of the house brand there.
Consumers are hoarding. Germany covers 94 percent of its sunflower oil needs with imports. 51 percent of global oil exports come from Ukraine and another 27 percent from Russia. For the time being, supplies from the Ukraine, which otherwise come to Rotterdam by ship every few weeks, are not to be expected.
It turns out that the war in Ukraine, together with the sanctions against Russia, has thrown global supply chains out of sync within a few weeks, and in some cases even interrupted them. The costs, especially for energy, have skyrocketed. Consumers feel this, but manufacturers and retailers also notice it and are forcing them to take action. Even if no general supply bottlenecks are currently to be expected.
“The entire consumer goods supply chain – from production to packaging to transport – is affected by the shortage of raw materials and the associated price increases,” says David Georgi, team leader for consulting at market researcher Nielsen IQ DACH. “Price increases have not only been an issue for the past three weeks,” emphasizes Georgi.
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Consumer prices for food and non-alcoholic beverages rose by 5.1 percent in February compared to the previous year, Destatis determined. Currently, the price rally for products with sunflower oil or wheat is particularly clear.
Consumer prices continue to rise
On Wednesday, for example, Thomy Pure Sunflower Oil cost an average of 2.79 euros instead of 2.29 euros a year earlier, an increase of 21.8 percent. This was determined by the Smhaggle price comparison for the Handelsblatt. Aldi sunflower oil Bellasan costs 28.8 percent more. Penny sunflower margarine is 25.2 percent more expensive.
“Sunflower oil could soon become scarce in Germany because of the war in Ukraine,” says the association of the oilseed processing industry in Germany (Ovid), “stocks will probably last for a few weeks.” The association sees no reason for panic buying: consumers could easily switch to other edible oils change.
Germans are also hoarding flour and pasta almost like they did at the beginning of the pandemic. According to Smhaggle, you are currently paying 20.2 percent more for Aurora Wheat Flour 405 than a year ago. On Monday, Moscow imposed an export ban on grain until the end of June. Almost 30 percent of all wheat exports come from Russia and Ukraine.
However, the degree of self-sufficiency with wheat in this country is over 100 percent. Federal Food Minister Cem Özdemir emphasized that the food supply in Germany is safe and warned against scaremongering.
In the event of short-term bottlenecks, customers can fall back on a variety of product alternatives, emphasizes Edeka, Germany’s largest food retailer. “At the moment, we can still ensure an adequate supply of all everyday products in close cooperation with our suppliers.”
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However, the German food industry is sounding the alarm: Within just a few weeks, your costs have risen so dramatically that margins are threatening to collapse. Wheat flour, sunflower oil, but also butter and sugar have become significantly more expensive for the Lambertz biscuit baker from Aachen. New contracts will be forthcoming in the near future.
Lambertz fires its ovens with natural gas. “Anyone who now has to buy natural gas from the spot market will face considerable difficulties. We are secured at least until the end of the year,” says Hermann Bühlbecker, sole owner of Lambertz. He is also happy if he still gets folding boxes at all.
The owner of the Lambertz biscuit and gingerbread factory is very worried: “We have an energy crisis, raw materials crisis, packaging and logistics crisis all at once. I have never experienced something like that.”
(Photo: dpa)
“We have an energy crisis, a raw material crisis, a packaging and logistics crisis, all at once. I’ve never experienced anything like it,” says the entrepreneur. The first wave of costs caused by the pandemic has not yet been processed, and companies are now being overwhelmed by the second wave of the Ukraine war.
“No manufacturer can survive without passing on the dramatically increasing costs,” warns Holger Rothfuchs, Managing Director Germany of snack manufacturer Lorenz. Consumers would have to adjust to higher food prices. Industry experts consider double-digit increases to be necessary in some cases. The trade is suddenly confronted with high price demands from all sides.
Bühlbecker sees the temporal dynamics as the big problem. “We medium-sized companies have no way of immediately passing on the additional costs to the trade.” Price agreements usually last for six months or a whole year. The negotiations usually drag on for months. Many had escalated this winter: dealers such as Edeka listed many branded products, for example from Eckes-Granini, PepsiCo or Mondelez.
Abandoning old rituals in price talks
Roland Verdev, Managing Director of The Family Butchers, therefore calls for a departure from the “old” negotiation rituals between retailers and manufacturers: “Now it’s pressing, otherwise many companies could suffer a broken neck.” accept price increases. “Some trading partners are willing to talk about monthly prices instead of the usual half-yearly or annual prices,” says Verdev.
Last week, Germany’s largest meat producer Tönnies suspended its contracts with retailers and demanded an immediate price adjustment. Tönnies refers to “force majeure” and “massive disruption to all business bases”: electricity and gas suppliers made use of their special right of termination due to force majeure. The logistics invoke force majeure because Ukrainian drivers are absent.
The large meat producers such as Tönnies, Westfleisch and Vion are demanding that retailers quickly adjust prices upwards.
(Photo: dpa)
Competitors Westfleisch and Vion have also been charging crisis surcharges of more than five cents per kilo of meat since Monday. Hubert Kelliger, Sales Manager at Westfleisch, observes: “The trade is understanding, makes contracts.” On Monday, Kelliger expected “quick results with the trade already in these days”.
The large food chains in Germany, which are in fierce competition, usually shy away from price increases. Just a few cents more drive customers to the competition. Discounters and private labels could benefit, speculates Georgi from Nielsen IQ. The trade is covered: “To what extent rising costs in the preliminary stages will actually be passed on by the chain, we cannot currently reliably predict,” says Rewe.
Stefanie Sabet, Managing Director of the Federal Association of the German Food Industry, warns: “The companies have reached their limits. Relief is urgently needed in order not to jeopardize the security of supply.” Entrepreneur Bühlbecker is not demanding any subsidies, but asks himself: “In an emergency situation like this, does the state have to collect heavily through mineral oil tax and value added tax?” His demand: the state must cushion the high energy prices , otherwise some manufacturers would be left behind.
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