BUSINESS

IOBE report on food costs

DIMITRA MANIFAVA

The rise in prices of raw materials and oil are primarily responsible for the major price hikes in food over the last three years, according to a report by the Foundation for Economic and Industrial Research (IOBE). In the medium term, however, food prices have risen due to changes in consumer standards and the revision of the European Union's Common Agricultural Policy, which in turn has brought an increase in producer prices, the report argues. The biggest hikes are in products directly affected by the rise in prices of raw materials, which amounts to 34 percent for pasta over the past three years and 23 percent for bread. In the first eight months of 2008, the price of pasta grew by 20.1 percent and of bread by 12.7 percent. Dairy products went up by 13 percent - 6 percent in the January-August 2008 period alone. However the report does not take account of competition distortions in the local market.

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