Food prices not dropping yet

Food prices not dropping yet

Market conditions at this stage do not favor a de-escalation in food prices anytime soon, warned the president of the Association of Greek Food Industries (SEVT), Ioannis Jotis, on Monday.

“The geopolitical turmoil is consolidated. Inflationary pressures continue to take their toll. The negative effects are not easy to reverse immediately,” he pointed out meaningfully at the SEVT annual general meeting.

He also argued that “there are factors that bring us face to face with issues of sustainability this year as well,” adding that they are the increased costs, the reduced purchasing power, the obstacles to the absorption of financial tools, the difficulty in finding employees, the limited absorption of resources for research and development, but also the demographic problem.

Given his company’s focus on baby food, Jotis specifically addressed the demographic issue, stating that while in 2010, according to the Hellenic Statistical Authority (ELSTAT), births were 114,766, in 2021 they had declined to 85,346, while for 2023 it is estimated they will fall to 70,000. At the same time, deaths amount to 130,000-140,000 per year.

The reduced purchasing power of consumers is also reflected in the latest data on supermarket sales, presented by Panagiotis Boretos, managing director of market research company Circana (formerly IRI).

In January-March 2023 a 0.9% drop in sales volume was recorded in food, which is actually greater than in other major product categories. Meanwhile the share of private label products increased to 19.3% in January-April.

Nikos Vettas, director general of the Foundation for Economic and Industrial Research (IOBE), referred to the investment gap in the Greek economy: “Despite the increase in investments in recent years, they are at 50% of the investments of an average economy in Europe. They cannot increase sharply, firstly, because there are insufficient domestic savings and foreign capital is not certain to choose Greece, and, secondly, because interest rates are still rising,” he stressed.

He pointed out that “those who are happy because Greek growth is higher than in other European countries should not be so [enthusiastic] considering we want to export our products to these countries.”

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