A recent study by the French finance ministry has concluded that the agricultural sectors, including food companies and retailers, aren’t taking advantage of inflation to disguise higher margins, reports Food Ingredients First.
“There were no profiteers of inflation in the food industry,” finance minister Bruno Le Maire commented on the study’s outcome this weekend.
“Neither the farmers, retailers, nor the food industry have taken excessive remuneration in the process,” he underscored.
According to the report, higher food prices result from a combination of factors, including the war in Ukraine, the post-Covid-19 recovery, global warming and drought, bird flu, and labor shortages.
Started by the finance ministry in July, the study tracked the margins on food products from 2019 and found the increase in retail prices is mainly due to the high cost of agricultural raw materials, which has risen far faster than prices passed on to consumers in recent months.
For instance, margin declines were “very significant” for pasta (-15.6%), ground beef (-6%) and chicken cutlets (-6.4%), according to the study, quoted by Les Echos newspaper.
Food prices have overtaken energy as France’s most significant contributor to inflation and are expected to continue pushing the cost of living higher through the end of the year.
After easing to an annual rate of 5.6% in the fall, inflation based on a national measure of consumer prices is expected to accelerate to 6.4% in December, the steepest rate in France since 1985.
Read more of this report published by Food Ingredients First.