The ongoing coronavirus pandemic means companies like Unilever, Procter & Gamble, and Kimberly-Clark face rising production costs, which will ultimately be passed on to supermarkets in the Netherlands, resulting in shoppers having to fork out more money for their favourite products.
According to the Financieele Dagblad (FD), food manufacturers are raising prices to cover the growing costs of raw materials and transportation. With extensive lockdowns severely impacting supply, and demand growing now that restrictions are being lifted, dairy, grains, oils and sugar have all become more expensive.
A United Nations index revealed that food prices increased by 40 percent between May 2020 and May 2021, with the price of palm oil rising by a whopping 70 percent over the past six months. Furthermore, packaging and transportation costs have also increased since last spring.
These changes have significant implications for a range of products on sale in the Netherlands. Unilever has been greatly affected, which means a number of brands - ranging from Andrélon to Unox - have seen their prices rise this year, and the Unilever CEO expects prices will continue to rise until at least the beginning of 2022.
So far, Dutch supermarkets have borne the brunt of these costs, and customers have been able to go about their daily shop without having to face rising prices. However, experts say the customers will inevitably foot the bill.
Thijs Geijer, an economist at the Dutch bank ING, told the FD that, over the coming months, people in the Netherlands will see the cost of their weekly shop rise. “Producers and supermarkets will first have to come to new price agreements. Because they often do not take effect immediately, you see the price increases reflected in the store with a delay.”
Aart van Haren, the CEO of Vomar supermarkets, says the chain continues to swallow the growing costs: “Now that grain prices are so high, the bread we bake in our bakery should actually cost 2,05 euros instead of 1,99 euros. But we want to be competitive, so we swallow that penny ourselves.”