FOOD INDUSTRY High food prices: Inflation or speculation in the stores? 10.1% By Hernando Ramírez-Santos The price increased in November 2021 over January 2020. igh food prices have consumers on the defensive. After overcoming the global pandemic emergency, in昀氀ation Frustrated, they are looking for those to blame for continued in the U.S. economy, which has reverberated globally. the continuous increases and demanding solutions Meanwhile, consumer frustration with rising food prices to the problem that is seriously impacting the continues to pressure supermarkets and the government. family economy. 吀栀e anger of shoppers has been According to 吀栀e Annual Survey, 2024 CPG + Grocery Hcompounded by the political rhetoric of Democrats Consumer Report, conducted by R.R. Donnelley & Sons and Republicans, who are using the problem as a campaign Company (RRD), most consumers are upset about high food issue in the presidential elections. prices. In response, they have decided to abandon loyalty to One sector considers supermarkets the culprits because they their favorite brands and favorite supermarkets in search of allegedly speculate on food prices to increase pro昀椀ts. better deals. For its part, the industry defends itself, arguing that its pro昀椀t margins have always been low and blaming in昀氀ation for the problem. Meanwhile, industry experts point out that supermarkets continue to operate with very low pro昀椀t margins, managing A Federal Law Against Speculation their prices in line with in昀氀ation, not speculation. Echoing consumer complaints, Democratic Vice President Kamala Harris announced during her presidential campaign a proposal to create a federal law banning price gouging throu- ghout the food industry. “I know that most businesses create jobs, contribute to our economy, and abide by the rules, but some don't, and that's not right, and we need to take action when it is,” Harris said at a campaign event in Raleigh, North Carolina. “As president, I will go after bad actors. And I will work to pass the 昀椀rst-ever federal ban against price gouging in food.” While acknowledging that some stores may be abusing grocery prices in isolation, experts and industry leaders agree that other factors are to blame for the problem. of consumers express frustration with rising prices across According to studies and economic analyses prepared by categories, including groceries, gas, and restaurants. experts, the COVID-19 pandemic disrupted the supply chain, triggering a spike in input and freight prices. As a result, food Cost Shifting, Not Speculation prices skyrocketed. Jason Miller, Ph.D., interim chair and professor of Supply Chain 吀栀is was re昀氀ected at the time in the Bureau of Labor Statistics Management at Michigan State University's Eli Broad College Consumer Price Index data for food at home: of Business, prepared an analysis for Abasto Continues on page 32... 3030 NNOOVVEEMMBBEERR/ D/ DECECEEMMBBEER 2R 200224 4 AABBAASSTOTO..CCOOMM