The increase in costs was already felt, but the war in Ukraine led to even greater increases, making production more expensive (with increased prices for flour and, accordingly, animal feed) and transportation of products (after the rise in energy and fuel prices), which will inevitably affect meat prices consumerism. Justification is given to Sunrise By livestock farmers, who say they are facing a “perfect storm”: “A price increase is inevitable and, unfortunately, will have an impact on consumption, which could lead to a decline,” says Apicarnes-Associação Portuguesa de Met Industries.
The association continues to enumerate what was felt in terms of ascent. “The factors of production have increased very significantly, namely: packaging materials, raw materials, various energy sources, gas – increased by more than 300% – electricity and fuel – which have increased by 300%.”
The list is growing, according to Luis Mera, general secretary of the Portuguese Farmers’ Union (CAP). “Diesel, the main source of energy used in agriculture, is up 43% compared to last year. Energy rose between 50 and 150%, fertilizers also increased brutally, as happened with food rations, so the price of meat should go up. Animals do not feed on air, but feed on rations that have reached a previously unreached maximum. Transportation also increased to transport animals to the killers, as did refrigeration. How can the final price not go up? It must rise,” our newspaper points out.
For Apicarnes, these cost increases leave producers with no alternative: “Otherwise, there will certainly be serious consequences for the economic sustainability of some companies.” And the problems don’t stop there. “Even if the war ends today, its impact on raw material production chains and logistics will still be felt for years to come. In short: inflation. We could have stagflation, which is worse for consumers and businesses.”
An opinion shared by Luis Mira: “There is no other choice, who will bear the increase in all this? The producer? Someone the killer or the butcher? The one from the restaurant? You can’t.” Attention is drawn to the fact that the market is working on rising prices. Inflation is rising. Only last month it rose to 7.2% last month, and this indicates that everything will increase.”
forgotten by the parties
Even the responsible person admits that transporting the products themselves is a real headache. “For example, I want to rent transportation for the next month, and that person says he can’t because he doesn’t know the price of fuel in a month, or he has shorter contracts, or variable contracts, or else he will have to give a price that gives room to accommodate these changes in fuel prices.
It is an issue that gains further revelation when, according to the CAP Secretary General, the sector is not felt represented by any party. “How many years has it been since I have seen a party leader give a speech on agriculture? And I am not talking about members who are likely to give a speech on agriculture. How many years has the PSD not made a speech on the subject? And PS? It does not happen and the rest is the same. ie A party that talks today about the problems of the peasants?” he asks, and admits, “I know nothing that I missed.” It states that we are facing an inflationary spiral and that the Portuguese government has done little or nothing compared to our Spanish neighbours. The Spanish government has cut fuel by 20 cents for everyone This measure alone has cost the Spanish government six billion euros.
In light of this scenario, Louis Mira holds that it is up to consumers to make choices, as the return in the face of rising inflation will always be shorter. “Spain already has 10% inflation and Portugal can reach that level. After all, it’s like reaching the end of the year and losing your paycheck,” he claims.
For Mira, there are no miraculous solutions: “If you want to go on vacation, you don’t have the money to go to the movies because the money doesn’t stretch. Or they work on a loose budget and they can handle very well an inflation increase of 5% per year because even if the employer increases by 5%, they either stay the same or lose their purchasing power. Inflation is this: there have already been increases in salaries, but the purchasing power will fall by 7% or you will be able to buy things 7% less. ” And it goes further: “There are always people They cut beef and choose pork, meaning they go from product A to product B because it’s cheaper.”
The increase in prices for products in the mass consumption sector, due to inflation and the consequences of the conflict in Ukraine, affects the purchases of Portugal. According to a study conducted by Kantar and analyzed by this market consultant and Centromarca – the Portuguese association of branded product companies, the volume of baskets is the lowest in the past four years, recording a decrease of 2.8% in the first quarter of the year. compared to the same period in 2019.
The same study reveals that “nearly everyone is affected by baskets a little smaller, but at a greater cost,” ensuring that the only part that goes against the trend is cleanliness and beauty, maintaining the devaluation already felt in earlier periods. Preference for care categories and larger mix up between distribution brands and manufacturer brands. “When analyzing the beginning of this year and comparing it to the previous year, there is an inevitable loss, in terms of value and volume, because in the first quarter of 2021 we were trapped. However, when comparing the first quarter of 2022 with the same period in 2019, the baskets are smaller, but more valuable. The pace of purchases remains stable, with young people being the group that increases the frequency of purchases, as has already been happening”, says Marta Santos, from Kantar.
The displayed figures indicate that 58% of the categories that raised the price, only 31% lost buyers, including basic categories such as rice, olive oil and margarine.
The study also highlights the continued and accelerating growth of distribution brands. “In previous crises, as in 2011, cost reductions in response to the crisis increased demand for distribution brands, which reached 37% of the value in the first quarter of that year, a value that subsequently declined due to strong strength. Promotional work for manufacturers. Today, this threat to manufactured brands is even greater, because there is a different context, where stores with very short formats focus on their own brands and flexible brands that have won the trust of many Portuguese”, says Pedro Pimentel, General Manager of Centromarca.
For the first quarter of 2019, brands preference for distribution was more pronounced in categories that increase price and lose buyers (gain 26 of 29 market share), such as UHT milk, fruit soda, or olive oil. «By analyzing the dynamics of purchasing channels, the study indicates that Discounts It continues to grow, and supermarkets and department stores are regaining some of their share in the face of the loss they felt at the height of the pandemic. When inflation begins to emerge and the bet drops further on the brands of distribution, one also thinks about where to buy and how the need to control spending might influence store choice » warns the official.