Christmas is likely to be more expensive. Due to the increases in energy and commodity prices. And the increase in production costs of some supply chains, such as the agri-food one, could lead to curious effects. Like the one, reported yesterday by Coldiretti, about bottled tomatoes: the packaging will cost more than the content. And if the Codacons esteem 1.4 billion is the largest expenditure by Italians for the Christmas holidays, under the lens of industries there is the increase in the cost of raw materials. In recent weeks, aluminum and zinc have returned to their 2007 highs. As well as steels, which have risen by 100% compared to summer 2020. And all this can only reverberate on the prices of consumer goods.
Costs of goods and tariffs
Also in consideration of the situation in the logistics sector and the impact that climate policies have in raising the prices of raw materials. The Ansa news agency explains that big names in the sector like Procter & Gamble have already announced the increase in the list prices for diapers. But now it will also increase the price of oral and skin care products. Unilever has also announced price increases for its products. If the alarm comes from the USA and Europe, this risk appears even more contained, judging by the surge in production costs that we witnessed in September (+ 14.2% in Germany) and by the probable maintenance at a high price level. for commodities and energy goods again next year, it may just be a matter of time before we see a general uptrend.
The increases will concern products such as microchips, batteries, razors. In addition to cars, phones and playstations. Not only. In the food sector, producers and distributors have reported increases in the prices of raw materials (flours, oils, butter, etc.) which could lead to increases in retail price lists for a multitude of processed products. Added to these alarms is the energy emergency, with electricity and gas tariffs that starting from October have undergone an increase of + 29.8% and + 14.4% respectively, causing higher costs for industries and businesses. And for which a new increase is expected just at Christmas. Finally, there is the expensive gasoline: green costs today 25% more than last year, as well as diesel. And these prices also end up determining upward adjustments in the retail price lists of transported products (in Italy 85% of goods travel by road).
The prices of Christmas
With even a prudential estimate of the increases, according to consumers only for the traditional Christmas dinner and lunch, families would end up with an expenditure of 900 million for fish, meat and cured meats (+ 2.5%), of 430 for wine and drinks (+ 1.5%), of 480 for vegetables, fresh and dried fruit (+ 2.7%); 300 for pandoro, panettone and leavened cakes (+10); 330 for pasta and bread (+ 10%). And perverse effects like that reported by Coldiretti. “The boom in prices for energy products and raw materials is reflected in the costs of food production but also on packaging costs, from plastic for flower pots to steel for jars, from glass for jars to wood for transport pallets and paper for product labels affecting different supply chains ». The result, according to Coldiretti, “is that, for example, in a 700 ml bottle of tomato puree sold on average for 1.3 euros, more than half of the value (53%) is the margin of commercial distribution with promotions, 18% are industrial production costs, 10% are the cost of the bottle, 8% are the value recognized for tomatoes, 6% for transport, 3% for the cap and the label and 2% for advertising”.
