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Accuracy: Who shrinks the packages so as not to increase prices

By George Lampiris

Discussions that bring to the surface a trick to reduce the content of food packaging are currently underway at a roundtable of individual corporate boards and in particular in categories such as dairy and cheese products. This discussion was put on the table, as reported in Capital.gr, market sources from different dairies, such a move could be a drastic solution to balance the increased costs and price increases that are eventually passed on to the shelves or refrigerators of supermarkets.

It is typical, for example, that one of the large dairy industries is at a fairly advanced stage of consultation within itself, with a view to changing the package of 1,000 grams in feta to an package of 800 grams, thus offsetting the cost increase. At the same time, another large dairy industry is in a similar round of discussions, also focusing on feta and the object of reducing the sales package of the product it produces.

On the table and the “shrinkage” in yogurt packages

In the context of the discussions, yogurt has also come to the fore under the possibility of reducing packaging by a specific company in the dairy industry from the 200 gram cup that is currently on the market, at 170 or 150 grams. It is noted, however, that these moves are currently being studied by individual companies and not by all companies in the industry, as a measure to address the increased costs and price increases that are reflected in their products at the final points of sale. However, they are indicative actions on the one hand of the problem that exists to deal with the increased costs in the supply chain, on the other hand of the already aggravated situation in the consumer budget, which is reflected in a simultaneous reduction of consumption in supermarkets.

From 250 euros per ton to 520 durum wheat for pasta

A high-ranking industry official with activity in the pasta sector told Capital.gr that the most important cost factor for his own business is energy, but the main burden factor is durum wheat, the price of which per tonnes increased from 250 euros a year ago to over 520 euros per tonne now. Then the total cost of production for its conversion into semolina has the effect of reaching and exceeding 700 euros per ton, an amount to which are added the increases in packaging materials, transport and energy.

The same person states that so far it has been on the pasta shelf in Greek food retail outlets, averaging an increase of about 10%. He points out that this increase is modest in relation to the overall picture of the pasta industry, predicting that there will be a second wave of increases in this food category in the near future.

“Heavy” energy costs for supermarket chains

In the case of supermarkets, market sources speak of a decrease in sales, which on average reaches 12% -13% in the first three weeks of January. This picture follows December 2021, when the market measurement company, NielsenIQ reported that the decline in sales for all supermarkets in Greece was -1%, in a month that reflects 10% of the total sales of the year, and all chains bet on it significantly to increase buying traffic.

Supermarket companies are under significant pressure from energy costs, which is the main parameter of their operating costs. Supermarket companies report that the blow to their profits in 2021 due to increased energy costs amounted to about 20%, while they expect this percentage to even double by 2022.

For their part, consumers are leading to prioritization of their markets, already burdened with increased energy bills and wider rising cost of living due to inflationary pressures that are more pronounced from November onwards.

Source From: Capital

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