inflation will make food more expensive at the reunion parties (and everything indicates that beyond)

inflation will make food more expensive at the reunion parties (and everything indicates that beyond)

After almost two years of pandemic, and after a more than decaffeinated Christmas of 2020, this December we hope to be able to celebrate the holidays in style. But the economic situation is not going to make it easy for us.

The logistical problems derived from Brexit, the carrier shortage and the generalized boom in the price of electricity portend a significant rise in the price of all goods, including food, which will surely be noticed in the shopping basket.

Ignacio Gonzalez, president of the Association of Large Consumption Companies (Aecoc), which brings together the main hypermarkets in Spain, assured in his annual Congress that we are facing a “Perfect storm”. Although he insists that there will be no shortages, prices will be very different, which many companies are already impacting on their customers. “We are condemned to rising prices,” González pointed out bluntly.

The Consumer price index (CPI) rose 2% in October in relation to the previous month and shot up its interannual rate to 5.5%, which is 1.5 points above the September rate. It is his highest level in 29 years. And everything indicates that it will rise even more in November and December.

“More sustainability is costs”

To the increase in expenses incurred by companies –light, raw materials, logistics …– we must add a slowdown in demand which was not counted on.

“When you tell the markets to decarbonize, they discount it”

“The rebound effect we thought was going to be brutal and we found out that it wasn’t: because upload the raw material, production costs, logistical problems … ”, he explains to Direct to the Palate Horacio Alemán, professor at the San Telmo Business School expert in the food industry “It is not that there are no deliveries, it is that they are being delayed”.

For German, in addition, inflation is not going to be a temporary problem: “Behind this we are choking the whole thing about decarbonisation and sustainability. The price of electricity partly comes from gas, which are geopolitical factors, but on the other hand there is the obsession with decarbonization. CO2 emission rights have risen dramatically. Brussels wants to impose a decarbonisation between now and 2050. And when you tell the markets to decarbonise, they discount it ”.

“More sustainability is cost and in the end this is creating a pressure to the whole system “Aleman continues “The shift towards more sustainability, which everyone sells as a mantra that cannot be questioned, has an energy regulatory cost that has not been properly evaluated.”

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The price of vegetable oils is 9.6% higher than the previous month and is at its highest level ever, according to the FAO.

A global problem

The rise in the price of food is not a problem unique to Spain. And increasing the bill for Christmas festivities in the developed world is a ridiculous problem compared to what can happen in the developing countries.

The FAO Food Price Index averaged 133.2 points in October 2021: 3.9 points (3.0%) more than in September and 31.8 points (31.3%). %) more than in October 2020. After rising for three consecutive months, in October it stood at its highest level since July 2011.

Climate change affects crops, which in turn have an impact on prices, which must be increased if climate change is to be curbed

It is the perfect storm also for hunger in the world. “We still have conflicts such as the climate crisis and the covid working together to push more people into misery,” said the chief economist of the UN World Food Program in the summer. Arif Husain. “Now high prices have joined the deadly trio.”

All problems are strongly connected in one vicious circle that no one knows for sure where it can lead us: climate change affects crops, which in turn have an impact on prices, which must be increased if climate change is to be curbed.

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It is difficult to calculate what the situation will be like in a few months, but in the face of rising direct costs and uncertainty, the food industry (and any other) protects itself by raising prices. There are already many large food companies that have announced major rises: Pepsico, Heineken, P&G, Danone, Nestlé, Ebro Foods …

Fill the cart the supermarket This Christmas will be more expensive for everyone, but there will be those who will not even be able to pay it.

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