Recent price increases in food have not translated into higher profitability for the food industry, according to a new analysis by Statistics Sweden (SCB).
Despite the sharp rise in food prices in 2022, the profitability of the food industry declined that same year. The downturn continued in 2023 and into the first half of 2024 according to SCB.
SCB examined profitability across four food sectors: agriculture, hunting and fishing, food and non-alcoholic beverage manufacturing, wholesale trade of food and non-alcoholic beverages, and the grocery trade, which includes retail stores.
Profitability in agriculture, hunting, and fishing has been consistently lower than in the other food sectors throughout the period, when adjusted for the labor costs of individual entrepreneurs. Also In the food manufacturing sector, profitability has been weak since 2021, and it turned negative in 2022 and 2023. Profitability in the grocery trade has also been decreasing since 2021.
– SCB’s data clearly shows that the food manufacturing industry has been hit hardest by the cost crisis. Our segment of the food supply chain is the only one showing negative figures. I knew the situation was extremely serious, but this is even worse than I expected, says Carl Eckerdal, chief economist at Livsmedelsföretagen (The Swedish Food Federation) in a comment.
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