Food prices in Germany continued to rise in June. Dairy products, sugar and vegetables rose massively year-on-year. Only one product group was significantly cheaper.
Inflation in Germany remains at a high level – far from the two percent target of the European Central Bank. The Federal Statistical Office announced today that the inflation rate rose slightly to 6.4 percent in June, thereby confirming its initial estimate. “The inflation rate has increased again somewhat after having weakened three months in a row,” said Ruth Brand, head of the agency.
Fuel cheaper – despite base effect
But why is inflation in Germany suddenly on the rise again? Experts like to point to a base effect: Last year, the federal government’s relief measures – fuel discounts and 9-euro tickets – pushed prices down.
But that is at best half the truth. The fact is that fuel was even 10.4 percent cheaper in June – despite the tank discount in the previous year. All in all, the prices for energy products were 3.0 percent higher than in the same month last year and thus lagged well behind the general increase in consumer prices.
Edible fats and oils significantly cheaper
On the other hand, the increase in food prices was again very high at 13.7 percent. Food therefore remains the strongest price driver of all goods sectors. Almost all groceries were more expensive than a year earlier. The price premium for dairy products was particularly large (plus 22.3 percent). The prices for sugar, jam, honey and other sweets also rose massively – here the plus was 19.4 percent.
But not only those with a sweet tooth, but also supporters of a healthy diet had to put more money on the table: vegetables were 18.8 percent more expensive in a year-on-year comparison. Only one product group stood out with a clear minus: edible fats and edible oils were 12.1 percent cheaper in June than a year earlier.
Are the big ones food corporations fault?
But why does food keep getting more expensive? Economists blame the increased raw material and energy costs as a result of the Ukraine war in the first place. The higher costs for fertilizer also make food production more expensive.
It is unclear what role the large food companies play in the rise in food prices. Consumer advocates are concerned that some food price increases are neither justified nor understandable. The accusation of “greed inflation” is in the air: corporations would use their market power to increase prices excessively.
Nestlé, Danone and Unilever under surveillance
Not only consumer advocates should therefore take a close look at the forthcoming quarterly figures from Nestlé, Danone and Unilever. In the first three months of the year, the food giants had raised prices by around ten percent on average.
The boss of the retail giant Rewe, Lionel Souque, sees a slight easing in the price war between trade and the food industry. Currently, however, hardly any manufacturer is willing to pass on falling raw material costs in the form of price reductions. “It doesn’t work that way, it still needs ‘education’,” Souque recently told the “Wirtschaftswoche”.
When are they going down? food prices finally?
Can consumers still hope for falling food prices? Economists are encouraging; For example, BayernLB chief economist Jürgen Michels expects food prices to fall more sharply over the summer.
But a look at producer prices, an important predictor of inflation, urges caution. According to this, food prices increased by 13.6 percent in May – so there is no sign of relaxation. Sugar even became more expensive by 88.9 percent. So it could still be quite a while before the prices of foodstuffs other than butter or cooking oil drop in the supermarket.