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Spar board rages: “We don’t accept that” – economy

Supermarket board member Markus Kaser is bursting at the seams: Large corporations are enriching themselves with “excessively excessive price demands” from customers’ lack of money.

According to preliminary estimates by Statistics Austria, inflation in Austria reached a new record high of 9.2 percent in July. Electricity and gas prices are skyrocketing, and household customers in Vienna and Lower Austria will have to dig deep into their pockets from September 1st. But for many Austrians there is not much left after months of inflation.

Read more: Electricity and gas are now thousands of euros more expensive

While the hard-working citizens don’t know what to do, the big corporations are almost swimming in money due to the crisis. Many have not only passed on the increased production costs to their customers, but also massively increased the prices just like that. The top managers then let themselves be celebrated for the new quarterly records.

Spar board “angry”

The Austrian retail giant Spar is now mobilizing against this behavior. In an unusually sharp manner, CEO Markus Kaser attacked the “immeasurably exaggerated price demands by some food manufacturers” in an interview with the “Kleine Zeitung”.

Spar board member Markus Kaser.Franz Neumayr / picturedesk.com

“While Danone, Nestle, Unilever and Co. are announcing enormous profits – more than 10 to 15 percent of sales – some consumers can no longer afford flour and pasta,” thunders Kaser. That makes him “angry” because “the profits of these listed greedy corporations are paid by the customers”.

When greed drives inflation

As he reveals, the increase in food prices is only “partially” related to the rising energy and raw material prices – keyword: edible oils. The corporations would simply turn up the rest, the manager angrily brings into play a term from the USA: “greedflation” – inflation driven by greed.

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Spar, Kaser further explains, has a good overview of how the prices for raw materials and packaging have really risen in recent months thanks to the in-house production activities within the framework of its own brands.

The group wanted inflation of 27 percent

Recently, however, a European food company knocked on the door and wanted to increase the cost price for milk, dairy products and cheese by 27 percent. “We then did the math and came up with an increase in production costs of four percent.” The company cited the Ukraine war as the reason for the exaggerated claim.

“We don’t accept that,” clarifies the native Tyrolean. Within a few days, however, the group rowed back and reduced the requirement to eight percent. The industrial companies would be entitled to profits, Kaser emphasized to the “Kleine Zeitung”, but such a margin would have been extreme. The food retail trade, which also includes Spar, works with a profit margin of only one to three percent of sales.

Lower price increases for organic products

The retail chain draws a clear red line for its customers here: “If products become too expensive to buy, we remove them from the range and offer alternatives from other manufacturers or from our own brands.” Both the cheap S-Budget and the more expensive organic own brand “Natur pur” have been bought by customers much more often since the wild ride of inflation. One of the reasons why the prices of organic products have risen less than others is that they have to do without pesticides and artificial fertilizers in production. Their prices had recently shot through the roof.

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And how does the other side see it? Despite this year’s increases of 6.5 percent, Nestle wants nothing to do with price gouging. According to the “Kleine Zeitung”, CEO Mark Schneider has announced his willingness to take on part of the inflation himself. And: “We are working very, very hard on increasing efficiency.”

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