EU Agriculture Commissioner Mariann Fischer Boel has called on Europe’s retailers to avoid raising prices excessively despite rising raw commodity costs putting pressure on suppliers.
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In her latest blog entry, Fischer Boel said recent price rises – particularly in dairy – were due to market dynamics but said excessive price rises at the retail end could hurt consumers.
“The increases in supermarket milk prices in some member states are definitely not warranted by the overall market supply situation in the EU,” Fischer Boel said.
“As we all know, the contribution of the raw material to the final price of foods like bread is relatively small, so I hope that the supermarkets and discounters will act responsibly.”
Weather conditions such as the drought in Australia has been cited as a key factor in the rising cost of milk. However, industry executives have pointed to rising demand in Asia and increased production of biofuels – a policy supported by the EU – as other reasons for rising commodity costs and higher food prices.
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By GlobalDataFischer Boel quashed suggestions that biofuel production is pushing up the cost of grain and therefore food prices. The EU wants biofuels to cover 10% of EU fuel demand, and the European Commission is drafting legislation that would force member states to increase biofuel production and consumption.
“As far as grain prices are concerned, I am keen to refute the idea that some people are putting about that it is largely the recent interest in biofuels that is driving up prices. This is not the case – they play a marginal role at most in the EU context,” Fischer Boel said.
“More significant by far have been low harvests in many regions of the world, bad weather in Europe and growing demand from east Asia.”
