Germany on the Brink of Food Crisis as Prices Increase by 20–50%
'The second wave of price increases is coming'
German is steeping toward the return of the dreaded Weimar hyperinflation as consumers brace themselves for massive price hikes for everyday goods and groceries at a whopping 20 to 50% rise.
Even before the war in Ukraine, prices soared by five percent “across the product range” due to increased energy prices, HDE President Josef Sanktjohanser warned on Friday.
Russia’s invasion is now pummeling economies and the supply chain as more price increases are on the horizon.
“The second wave of price increases is coming, and it will certainly be in double figures,” Sanktjohanser warned, cited by The Local.
The first retail chains have already started to raise their prices in Germany, and the rest will likely follow, according to the president of the trade association.
“We will soon be able to see the impact of the war reflected in price labels across all the supermarkets,” said Sanktjohanser.
Popular retail chains such as Aldi, Edeka, and Globus, announced they would raise their prices.
From today, meat and butter will be “significantly more expensive” at Aldi due to price hikes from suppliers.
Translated: Aldi, for example, expects increases of 20 to 50 percent in its purchase prices in the coming weeks. Already on Monday, meat, sausage and butter are to become "significantly more expensive" at Aldi Nord. pic.twitter.com/f03pzO3ggr— Gregory Linton (@wuastr) April 3, 2022
“Since the start of the Ukraine war, there have been jumps in purchase prices that we have not experienced before,” a spokesperson for Aldi Nord announced on Friday.
Just two weeks ago, Aldi raised the prices of about 160 items, later adding 20 more items as other supermarts followed suit.
Earlier this year, it was announced that Germany’s cost of living rose at the highest level since reunification, with everyday goods increasing by an average of 7.3%.
According to the federal statistics agency Destatis, the jump from January’s figure of 5.1 percent to February’s 7.3 percent reflected the impact of Russia’s invasion of Ukraine, which made oil and gas prices soaring.
According to a recently published survey by the Ifo Institute, almost all companies in Germany’s food retail sector are planning price increases.
But industry experts don’t expect a lack of products on the shelves anytime soon, but that is to be expected if prices are so high that consumers cannot afford them.
The president of the farming association, Joachim Rukwied, the food supply in Germany is assured for at least another year, but after this forecasts are less certain.
Meanwhile, supermarket owners have been complaining of the sort of panic-buying not seen since the pandemic.
Last week, the CEO of Germany’s multinational BASF SE warned that cutting off energy imports from Russia would result in pushing Germany into its most “catastrophic” economic crisis since World War 2.
“To put it bluntly: This could bring the German economy into its worst crisis since the end of the Second World War and destroy our prosperity.”
“For many small and medium-sized companies, in particular, it could mean the end.”
He added that higher prices are already having a huge impact on the food supply, given that BASF was forced to reduce the production of ammonia for fertilizer production.
Brudermuller described this as “a catastrophe, and we will feel it even more clearly next year than this one.”
“Because most of the fertilizers that the farmers need this year have already been bought,” he said.
"In 2023, there will be a shortage, and then the poor countries in particular, for example in Africa, will no longer be able to afford to buy basic foodstuffs."
“There is a risk of famine,” he warned.