Status: 04/21/2022 11:18 am
The world’s largest food company Nestlé raised prices by 5.2 percent at the beginning of the year, significantly increasing sales. Further price increases are planned soon – but there is resistance from the retail trade.
The Swiss food group Nestlé increased its sales to CHF 22.2 billion in the first three months of the year, primarily thanks to significant price increases. No information was given about the win. The company, which owns brands such as Nespresso, Maggi and KitKat, pushed through price increases of 5.2 percent worldwide. According to the company, this was a response to rising costs for raw materials, packaging, energy and transport.
differences between continents
At the same time, Nestlé made it clear that consumers must be prepared for further price increases. “Cost inflation continues to rise sharply, which is why further price adjustments and containment measures will be necessary during the course of the year,” said CEO Mark Schneider. So far, despite the higher prices, demand has not decreased. Schneider described the previous price increases as “responsible”.
Nestlé raised prices to varying degrees in different regions of the world. While the group put the price increases in Europe at 4.1 percent, they were significantly higher in North America at 8.5 percent and in Latin America at 7.7 percent. This also partly reflects the general development of inflation rates in the respective regions.
Russia business excluded
In view of the war in Ukraine and the sanctions imposed by the West, the group now excludes Russia from the growth figures, but noted that growth including the region would have been even higher. After clear criticism, Nestlé decided in March that it would only sell essential foods in Russia in the future.
Traders warn against excessive price demands
The food retailer Edeka warns its suppliers against excessive price demands due to increased costs for energy and logistics. It is dangerous when some industrial groups try to maximize their returns with excessive price demands, said Edeka boss Markus Mosa when presenting the balance sheet for 2021. “Food must not become a luxury good,” said Mosa. “We will continue to examine each claim very closely.” Unavoidable price increases should not only be imposed on consumers, but should be distributed along the entire value chain.
The Edeka boss made a similar statement to Rewe boss Lionel Souque two weeks ago. He, too, had warned against exaggerated demands from suppliers and made it clear that some of the international food companies were currently trying to make extra profits. Souque also emphasized that higher production costs could not be passed on to consumers in full, but had to be “distributed throughout the system”.