Consumers sitting ducks to the big multiples

RISING food prices and increasing food scarcity are two of the most potent concerns in the global economy at the moment.

The US is wrestling with the worst food inflation in 17 years, and analysts say it is getting worse.

That’s putting the squeeze on poor families, and the rising food price phenomenon is forcing bakeries, bagel shops and delis to explain price increases to their customers.

In 2007, food prices rose 4% compared with an average 2.5% annual rise for the past 15 years, according to the US Department of Agriculture. This year could get worse, with prices rising as much as 4.5%.

By comparison with the rest of the world, US households still spend less of their income on food than in any other country at 7.2% in 2006. That outlay contrasted with 22% in Poland and a whopping 40% in Egypt and Vietnam.

In Bangladesh, economists estimate 30 million of the country’s 150 million people could be going hungry, while Haiti’s prime minister was ousted in April following food riots.

Haiti’s parliament voted to dismiss prime minister Jacques-Édouard Alexis after protests over rising food prices that saw at least one UN soldier killed.

The vote to dismiss the prime minister reflected widespread frustration over the rising cost of living in the impoverished country that sparked the deadly riots.

All issues, however, are local and, while obesity may be the biggest problem in the US, the level of hunger in that great economy has also been contentious for quite some time.

As prices rise, those on the margins suffer most because dearer food literally takes the bite out of their mouths.

Here at home we pay more for our food than most nations and are the 16th most expensive for food on the planet, according to official statistics.

For a country linked to quality food production, where up to 50 years ago agriculture was the backbone of the economy, it is hard to square that with the high cost of our food.

Last year we exported more than €8 billion in food and drink, and the sector is one of the most dynamic and important indigenous sectors of the economy, but that could be about to change as high prices drive us out of key markets. The cost issue is being reflected in a massive switch to imported meat from Brazil and elsewhere as the services sector struggles to keep costs under control.

Food prices are a huge issue even in an economy deemed to be one of the wealthiest in the developed world.

Even as the euro rises against sterling, economists have observed that imports from Britain are not falling in price.

For years critics have pointed to the disconnection between Irish and European prices, but nothing seems to change.

One recent survey found cheese prices in Europe were 50% less than here.

It’s the common complaint of people coming back from holidays abroad — that the cost of food and drink was way below what it is here.

If food price trends continue, consumers here may become very critical of what they are paying over the counter and for meals when they eat out.

Overall, the Irish consumer is not being well served by the big players in the grocery trade and to an extent they have themselves to blame.

Because of their obsession with bulk shopping they will remain sitting ducks for the big multiples that continue to delude us that they offer value for money and continue to conjure up new ways of separating us from our hard-earned cash.

As prices continue to rise, maybe — just maybe — we will finally be forced to start to question such blind loyalty to the big multiples.

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Wednesday, September 22, 2021

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