This is an observation that will surprise many. With a gain of 0.6%, “food prices have not increased or increased very little in 2021”, affirmed Philippe Chalmin while presenting the annual report of the Observatory of prices and margins. And this despite very high inflation on raw materials caused by the return of Chinese demand and various climatic disorders in the world.
In fact, food had increased more in 2020, with an increase of 1.9%. The surge in raw materials was not actually passed on to the consumer last year.
9% jump in agricultural prices
Agricultural prices, they jumped 9.1%, driven by the impact of the rise in gas on the price of fertilizers (ammonia and urea). “These increases were initially digested by agrifood companies and distributors”, who amortized them by pinching their margins, Philippe Chalmin further specified. “It is very striking how well companies play a buffer role and how much the consumer is spared. »
Not all products are created equal. In terms of increase on the shelf, fruit stands out with an average increase of 4% in 2021, followed by poultry at 2.9% and beef at 1.7%. The reopening of restaurants and canteens has helped beef prices. The baguette has changed little, at 0.7%, despite the sudden surge in wheat prices from the summer of 2021. This in fact only accounts for 8% of the cost of production of bread.
In terms of stability for the consumer, there are dairy products, standard ham, vegetables and aquatic products (mussels, scallops, etc.). Down (-0.9%), and this is the exception, fresh pork. Roast pork plunged 9% and pork chop 3.7%. The Observatory of Prices and Margins explains this specific situation by the “ebb of Chinese demand” after two years of major deficit in national production following the swine fever epidemic.
Efforts by manufacturers and distributors
More than the distributors, they are industrial who initially saw their gross margins shrink. In fact, each product has its situation. With regard to basic pastes, the observatory notes that manufacturers have “sharply contracted their margins (minus 10 points)”, while for brands they have increased from 15.9% in 2020 to 17.3% in 2021. , against durum wheat which had increased by more than 25%. As a result, the consumer suffered almost no backlash. Over six years, the retail price of pasta is even slightly down.
For cooked ham, here again, it is the charcuterie-salting companies that have tightened their belts in 2021. While for minced steak, a very competitive product for mass distribution, brands and manufacturers have tightened their margins. In the case of UHT milk, whose retail price is stable despite huge fluctuations in raw materials, it is the manufacturers who have increased their margins by 6%, the distributors have not changed theirs.
For the FNSEA, this report, which shows that the rise in agricultural costs had started well before the war in Ukraine, must lead to urgent trade renegotiations. “On the eve of a new trade relations monitoring committee and while many renegotiations are bogged down […] “, the union calls” the State to the greatest firmness to lead to the renegotiation of these prices”.
A cultural exception
France is the only country in Europe to have set up a price and margin observatory. “The Germans do not see the point and even believe that we are going too far in transparency. It is true that the elasticity of food prices to agricultural prices is much greater across the Rhine,” said Philippe Chalmin.