Boiled and raw sausages as well as cured products have become significantly more expensive for consumers in 2022.
(Photo: imago/Geisser)
Dusseldorf Whether salami, boiled ham or Lyoner – self-service packaged sausage has become significantly more expensive for consumers in 2022. At discounters such as Aldi, Lidl, Penny or Netto, the prices for scalded, raw sausage and cured products have risen by an average of 24 percent in times of inflation.
However, only a little of the additional income has reached sausage and ham producers, butchers and pig farmers. This is shown by an analysis by the management consultancy Ebner Stolz, which is exclusively available to the Handelsblatt. “There is only one winner of the price jumps: the food retail trade,” concludes study author Klaus-Martin Fischer.
“The price increases in retail are significantly higher than those of the upstream stages in the value chain – and considerably so,” emphasizes industry expert Fischer, who has a deep insight into the books of eleven relevant sausage manufacturers and butchers. According to this, the sausage and ham producers examined increased their prices compared to the trade only once on average in March 2022 by around twelve percent compared to the previous year. On the other hand, after a double-digit price jump in March, the discounters raised the prices for the examined shopping basket four times on average.
Manufacturers were usually unable to pass on higher costs
At discounters, more than 60 percent of the entire sausage market volume is self-service (SB) sold. The shopping basket examined represents more than 65 percent of the self-service sausages sold in discount stores. The Schwarz Group announced that it did not provide any information on the pricing of the Lidl and Kaufland retail divisions. Aldi Süd also does not comment on the purchase or sales prices of individual items or product groups.
Penny’s mother Rewe said in general: “We will continue to make sure that price adjustments are only passed on to our customers where there is actually high cost pressure.” General costs have also risen for retailers in times of inflation.
The sausage and ham manufacturers had to contend with high additional costs for raw materials, energy, personnel, logistics and packaging, according to the Federal Association of German Sausage and Ham Producers. “For the majority of our members, it should not have been possible to pass on the increase in costs to retailers,” says Managing Director Horst Koller.
The trade only accepted the lower cost increase for the notified meat prices. He rejects the increased prices in the other areas rigorously. It must therefore have been difficult for the majority of the industry to produce to cover costs. “Due to the market power of the trade, sausage and ham producers are forced to accept the ruinous price policy – despite possible negative cost recovery margins,” says Keller. “Or they forgo certain trade orders.”
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Industry expert Fischer observes that the larger the processors and butchers, the redder the figures. “The slaughterhouses have not been able to pass on the increased slaughter animal prices and operating resource costs sufficiently,” confirms Heike Harstick, general manager of the meat industry association.
Pig farmers were in the red in 2022
According to consultant Fischer, it is even worse for the producers: “Pig farmers and piglet breeders were in the deep red until recently.” The payout prices for slaughter pigs have risen significantly over the course of 2022, but so have the costs, especially for feed and energy. “Although the situation improved towards the end of the year, the pig farmers were still clearly in the loss zone,” emphasizes the interest group of pig farmers in Germany. According to estimates by the association, German pig farmers lost 43 cents per kilo slaughter weight in 2022.
Thomas Roeb comes to similar conclusions as the advice given to Ebner Stolz with mixed minced meat. The professor of commercial management at the Bonn-Rhein-Sieg University of Applied Sciences estimates the additional gross profit from trading on one kilogram of minced meat at 1.75 euros. The trade, which also had rising costs, would have pocketed most of the price increase of 3.20 euros.
In January, the chairwoman of the Federal Association of Consumer Advice Centers, Ramona Pop, brought up an “excess profit tax” for the food industry as well. “Whether and to what extent food companies and retailers enrich themselves from the crisis will ultimately be shown by their profits,” says Pop.
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