What is the truth about the high prices of foodstuffs and commodities? Inflation has reached record levels in the past two years, interest rates on loans, loans and mortgages have skyrocketed, and consumer prices have soared as a result, causing cartwheels to hit and weighing heavily on the pockets of Italians. But it’s not all inflation’s fault.
- The truth behind the rising prices of food and consumer products
- Research and real data on rising prices of food and consumer products
- What do they expect new government interventions to control spending prices
The truth behind the rising prices of food and consumer products
The rise in the prices of food and consumer products does not depend solely and exclusively on the increase in inflation I reached for the stars. According to British research by Unite, the UK’s largest private sector trade association, in fact, the increase in food prices is not only the result of increases in raw material prices, but will also be caused by Speculation on companies in the division of profits.
According to the British experts who conducted the research, the big companies fueled inflation by raising prices to numbers that are not justified by the increase in the cost of raw materials, and thus grocery prices reached record levels and shareholders and owners shared the profits.
Therefore, it is corporate profits that drive up inflation which in turn has repercussions for consumers. This means that Companies to maintain higher profits and achieve higher profits, increase consumer prices which citizens now in many cases struggle to purchase. To pay, therefore, are the citizens and the workers.
However, the ECB emphasized that profits in some sectors are growing strongly and consumer prices are rising rapidly, although in fact wholesale prices have been falling for a while, which is why they may start to fall.
However, in order for the company’s profits to fall, so as not to raise rates too much, the ECB itself will have to continue to keep rates high, but in this case there will certainly still be negative effects on consumers and households, between high prices and higher rates.
Research and real data on rising prices of food and consumer products
Researchers from a large union of the private sector in the United Kingdom clearly described the situation regarding the real increase in food and consumer goods prices, as they reached the conclusions that were revealed after analyzing the 350 largest companies listed on the London Stock Exchange, which shows that average profit margins, that is, revenues of a company that is higher than the cost of sales, increased from + 5.7% recorded in the first half of 2019 to + 10.7% in the first half of 2022.
The companies analyzed include supermarket giants such as Tesco, Sainsbury’s and Asda, which generated combined profits of £3.2 billion in 2021, almost double pre-pandemic levels, but also food giants involved in food production and processing, such as Nestle, which made net profits of £13.7 billion, an increase of almost £4 billion in 2019, a trend that continued in 2019. 22 also with the sharp increases of their products.
What do they expect new government interventions to control spending prices
Given the prices of consumer goods which have now skyrocketed and the difficulties many Italians have in subsidizing the new costs, The government decided to intervene by defining new measures to control consumer prices.
According to the latest news, the Minister of Enterprise and Industry of Italy Urso has made it clear that to deal with inflation, even if it is decreasing, solutions are needed to counter unfair commercial practices. Precisely for this reason, a discussion was launched that would lead to an agreement with a wide distribution, which also includes the production system.
According to what has been announced, there are promises that next week will be decisive for reaching an agreement to actually reduce consumer goods prices. The government intends to reach an agreement with the commercial network with the aim of freezing the price hike of a basket of basic necessities.
Another intention of the government is also to intervene against the distorting practices of airlines, which have increased their costs excessively for summer flights, making departures to Italian destinations very stressful, almost impossible.
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