FMCG Associations Urge Food Manufacturers to Cut Prices
Several FMCG associations in Italy have submitted a letter of intent to the government, urging food manufacturers to lower their prices. This joint effort aims to counteract the negative effects of inflation on consumers and families.
The associations, including Centromarca, Federalimentare, IBC, and the Italian Food Union, recently met with the Ministry of Business and Made in Italy to discuss measures against inflation. A letter of intent was presented to Minister Adolfo Urso to encourage collaboration in tackling this issue.
One of the proposed actions is to provide information on inflation-fighting initiatives developed by the Ministry to all association members. These initiatives will then be voluntarily implemented by food manufacturers for the October-to-December period, in line with fair competition practices and their economic sustainability.
Each company will assess the impact of production costs, including raw materials, energy, logistics, and packaging, on their economic accounts. Any proposed initiatives will need to comply with legislation on unfair commercial practices in the agri-food supply chain.
Call for All-party Involvement
The associations have also suggested a meeting involving the entire supply chain. This meeting, to be hosted by Minister Urso, will include representatives from processors, raw materials suppliers, energy and logistics companies, and packaging and distribution sectors.
The presidents of Centromarca and IBC emphasized the importance of protecting purchasing power and combating inflation in the current economic situation. They expressed their hope for a prompt convening of the working table by Mimit to address the inefficiencies and costs within the consumer goods supply chain.
Highlighted in the letter of intent are the economic challenges faced by consumer goods companies, such as supply chain inflation, energy costs, raw material supplies affected by the Ukraine war, and weather conditions in Italy.
In August, Italy’s inflation rate dropped to 5.5%, the lowest since January 2022. Processed food inflation stood at 10.1%, and unprocessed food inflation at 9.2%. While some input-cost inflation has not been fully passed on by manufacturers, they face the task of balancing business protection and job security with consumer demands.
Similar efforts to address high food prices have been seen in other European countries. Portugal extended a zero VAT holiday for essential food items, and France reached an agreement with producers to freeze or reduce prices on various goods. However, some manufacturers, including Nestlé, PepsiCo, and Unilever, have faced criticism for their perceived lack of contribution in the fight against inflation.
