In a dramatic appeal ahead of major German dairy congress next week, Heinrich Gropper, owner of the Gropper dairy, calls on the retail trade not to leave manufacturers alone with the current cost increases. “Increases are a must, otherwise companies of our size are threatened with extinction. At the end of the day, it’s about a solidarity between trade and industry. The trade has understood this in principle, but now it must be followed by action”, the private label professional emphasises. All relevant cost items of the dairies have increased by at least double-digit percentages compared to the previous year. All elements of the value chain are affected – from raw milk to cartons and packaging, energy and transport costs. This is a particular problem for suppliers of private labels with long-term contracts. As a rule, these contracts set prices at which it is no longer possible to cover costs.
“We need flexible solutions and contracts with shorter terms of three to four months,” Gropper demands. “The increase in raw milk prices alone means additional costs of €60m for my company.” Depending on the category and degree of processing, the dairy would have to increase prices by between 10 and 50 per cent, Gropper said. These are orders of magnitude that he cannot absorb through productivity gains. Similar tones were also heard from Schwälbchen and Hochland. “The usual methods of price adjustment are no longer sustainable,” says Hochland boss Peter Stahl as well. “The dairies need price increases as quickly and massively as never before. I have not experienced a similar situation in 28 years at Hochland.” The message has long since reached the trade, which at the same time is worried about scaring away customers with sometimes significant price increases. S
Aldi commented on the current situation that it is aware of the situation of manufacturers. “We safeguard the livelihoods of our suppliers and ensure the supply of goods,” said Erik Döbele, purchasing director at Aldi Süd. “Price increases are sometimes unavoidable for retailers, although we cushion many of them,” said the Aldi manager. “When the supply chains and costs allow, we at Aldi will also be the first to lower prices again,” is the promise of Germany’s largest discounter.