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19 Feb, 2023 11:37

Global food giant issues grim warning

Nestle expects prices for staple items to keep on rising in 2023
Global food giant issues grim warning

The world’s biggest food corporation, Nestle, has said prices for staple items will continue to grow during 2023, after more than a year of price increases that have forced the ordinary consumer into an ongoing struggle to buy groceries.

The giant increased prices by 8.2% last year, but says this was not enough to offset a rise in its own costs that had substantially dented profits.

According to Nestle CEO Mark Schneider, Nestle's price increases, which are expected to vary by market and category, will be “very targeted” and will only be implemented where “input cost inflation justifies it.”

“We are still in a situation where we’re repairing our gross margin and, like all the consumers around the world, we’ve been hit by inflation and now we’re trying to repair the damage that has been done,” Schneider said.

The executive provided no details on what projected increases will affect which of Nestle's 2,000 brands, a range spanning confectionery, frozen foods, and baby formula.

“Last year brought many challenges and tough choices for families, communities and businesses,” the company's statement reads. “Inflation surged to unprecedented levels, cost of living pressures intensified, and the effects of geopolitical tensions were felt around the world.”

Higher commodity costs and wages have brought the problem of pricing strategies into sharp focus for food-producing companies as they struggle to maximize their profits without turning away customers.

Unilever, Coca-Cola, Heineken, Colgate-Palmolive and Procter & Gamble have all flagged further increases in the prices of their goods in 2023, as they grapple with elevated commodity, energy and labor costs.

For more stories on economy & finance visit RT's business section

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