First the pandemic with supply chain problems, then the Ukraine war with price increases: the food industry is facing major challenges – and is nevertheless posting staggering sales. For consumers, on the other hand, things are likely to be even harder.
Despite increased prices in supermarkets, the food industry says it is under pressure. According to the Federal Association of the German Food Industry in Berlin, the higher sales prices do not reflect the actual extent of the production cost increases. The cost explosion come only partially to the consumers. Further price increases in the second half of the year cannot be ruled out.
With 103.3 billion euros, the industry made almost 16 percent more sales in the first half of the year than in the same period last year. According to the association, the price-adjusted increase was only 0.8 percent. Meanwhile, production increased by 7.6 percent after calendar and seasonal adjustments.
“The cost increases that manufacturers are facing are increasingly jeopardizing operational safety and thus employment,” explained Managing Director Stefanie Sabet. “With the supply chain problems of the pandemic still unresolved, the war in Ukraine has confronted food manufacturers with even more serious commodity shortages in agricultural goods, energy and packaging.” The companies needed unbureaucratic and effective support.
With a share of almost 67 percent of total sales, the domestic market remains the main sales market for the industry. “The export quota could not be expanded,” it said. Market developments in promising third countries – i.e. countries outside the European Union – have come to a standstill.
