Food prices continue to rise in Europe
Food is getting more expensive all across Europe because of rising raw material and energy prices, but big businesses are also contributing to inflation, a recent analysis shows.
Food prices continue to rise in France and Spain as a severe food crisis rages across the European Union, Bloomberg writes, highlighting the hike in food prices through two national dishes, French coq au vin and Spanish paella.
The price of the main ingredients needed to prepare French coq au vin, or rooster in red wine, rose by 15.4 per cent to over 19 euros in March compared with the same period a year ago, figures published by the national statistics office and the ministry of agriculture and nutrition show.
France is the largest poultry consumer in the EU. The price of chicken and rooster, the main staples of the traditional dish, rose by around 18 per cent, carrots by 33.5 per cent and butter by 23.9 per cent. But the price of wine, one of the most important ingredients of the dish, also rose by 8.4 per cent.
As V4NA has highlighted in a recent acticle, figures published by INSEE, France’s National Institute of Statistics show that food prices in France were 15.8 per cent higher in March than this time last year, forcing more than half of the population to give up certain things. Because of a terrible price hike, more than half of French people, 51 per cent, have given up the salty and sweet snacks that are, just like aperitifs, essential.
Meanwhile, the price of the main ingredients used in the Spanish paella has also soared, according to Bloomberg’s monthly Paella Index, based on data published by Spain’s National Statistics Institute. The typical Spanish dish is now 18.5 per cent more expensive to prepare than a year ago. The price of olive oil jumped 32.1 per cent, while the price of vegetables increased by 27.8 per cent year-on-year and by 5.7 per cent month-on-month. Rice prices are up 22.1 per cent compared to a year ago.
The Spanish Young Farmers’ Federation is warning of further price hikes due to an expected shortage of olive oil caused by last year’s drought, as yields have already fallen significantly in Spain, the world’s largest olive oil producer.
However, food is getting more expensive all across Europe because of rising raw material and energy prices, but big businesses are also contributing to inflation, a research by Unite, the UK’s largest private sector trade union, revealed. Unite analysed reports from hundreds of companies.
Supermarkets, food manufacturers and shipping companies are among the hundreds of large companies that have increased their profits and protected shareholder dividends in recent times,. This has caused further price hikes while workers have experienced the biggest drop in living standards in a century as a result of the cost of living crisis, the research points out.
An analysis of the 350 largest companies listed on the London Stock Exchange showed that average profit margins rose from 5.7 per cent in the first half of 2019 to 10.7 per cent in the first half of 2022.
This means that the average profit margin of the companies in the report jumped by 89 per cent in the first half of 2022 compared to the first half of 2019.
In the UK, Tesco, Sainsbury’s and Asda have a combined profit of 3.2 billion pounds in 2021, almost double their pre-pandemic profit levels, the 170-page report by Unite reveals. Global food producers such as Nestle also increased profits and margins over the past 18 months.
Higher profit margins are the result of „collusion” by large companies to increase the prices of hundreds of goods and services by passing on price increases to protect themselves from the effects of higher raw material costs, the report found.
Unite’s Secretary General Sharon Graham says households are suffering from a systemic problem. „Our research reveals where and how the economy is being manipulated against workers – from supermarkets to energy bills, from oil refineries to transport, we are all paying the price,” she said.
Ms Graham is concerned that Bank of England and Treasury policymakers are focusing on workers’ wages, presuming that this is what’s driving up prices, while analysis of corporate profits shows that boards of directors are in fact playing a significant role in the process.
The supermarket chains referred to in the report denied that they were partly responsible for the price hikes. “We are acutely aware of the pressures that millions of households are facing at the moment, and our priority remains to do everything we can to keep prices low for our customers,“ a Sainsbury’s spokesman said.
Catherine Mann, an official at the Bank of England, recently said she was „concerned about the pricing power that companies are gaining, and about the acceptance of these price hikes by a large proportion of consumers.”