Trade rejects guilt for expensive food

2023-05-08 05:18:39

Social Affairs Minister Johannes Rauch and Vice-Chancellor Werner Kogler from the Greens and Agriculture Minister Norbert Totschnig (ÖVP) want to discuss Monday at a food summit with representatives of trade and industry what could be done to counter the sharp rise in food prices. On Sunday evening in the “ZiB 2” the head of the trade association, Rainer Will, denied any blame for the price increase for his industry: “The competition is perfect,” said Will.

Cause and effect are being confused with inflation, Will said. “The causes are the energy costs going through the roof, the rent increase and the personnel costs, but also the financing costs of the banks.” The government only supported industry and failed to support trade. Nevertheless, food prices have risen the least in Austria in an EU comparison.

Although energy prices have fallen on the stock exchange, “but the energy suppliers are not passing it on,” said Will. The domestic trade only has a one to two percent profit margin. However, the listed international branded goods producers have recorded double-digit percentage increases in profits.

Video: Trade association spokesman Rainer Will as a guest in “ZiB 2”:

The managing director of the trade association also rejected the Chamber of Labor’s criticism that the prices for retailers’ own brands had risen particularly sharply. This can be explained by the fact that the energy prices have a larger share of the costs for the cheaper own brands.

If there were to be a reduction in VAT, as suggested by the SPÖ, FPÖ and the Greens, retailers would “of course” pass on the reduction one to one, Will assured.

The French model envisaged by Finance Minister Magnus Brunner (ÖVP), which envisages temporarily freezing the prices of certain foods, is not possible, said Will. “If the other drivers cause inflation to rise, we cannot hold prices.” In addition, with the model, the large chains are “assumed to pay a fee that is not achieved”. The Minister of Finance had also completely forgotten the local suppliers. “They would lose the customers completely because they couldn’t possibly come along.”

Although the food market in Austria is almost entirely controlled by the four big chains Rewe, Spar, Hofer and Lidl, none of these retailers can raise their prices because they would otherwise lose customers, argues Will. “So the competition is perfect.”

“Only twelve salaries in Germany”

Will justified the fact that the prices in Austria are significantly higher than in Germany by saying that “in Austria you earn 14 salaries, in Germany only 12”. In addition, the VAT for staple foods is 7 percent in Germany and 10 percent in Austria, the promotional share is 30 percent in Austria and 10 percent in Germany. In addition, Austria is a small market and procurement is therefore more expensive.

Rainer Trefelik, chairman of the Federal Trade Division in the Chamber of Commerce (WKÖ), had already argued in a similar way. In a guest commentary in the “Kurier” he also pointed out that the domestic trade has a very high branch density in an international comparison and that the transport costs for supplying the shops would also affect the prices. In addition, more organic products are consumed in Austria, which are more expensive.

IHS Director Klaus Neusser has also been invited to the social summit on Monday. He believes that freezing the prices of certain foods for a certain period of time is worth considering, as he said in the ORF “Press Hour”. “Everything that is done on a voluntary basis is certainly good.” A VAT reduction for certain foods, on the other hand, would fuel demand and thus inflation.