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“Price risk over two euros per liter”

“Price risk over two euros per liter”
“Price risk over two euros per liter”
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The prices of basic necessities such as the milk. The alarm comes from important industries such as Lactalis (which includes brands such as Galbani, Parmalat, Invernizzi, Locatelli) and Granarolo. The price of milk, due to the increase in the costs of energy goods, could exceed 2 euros per liter. An “unthinkable” fact for a primary and fundamental food in the Italian diet. «The strong concern for a runaway inflation that has been affecting the Italian agri-food industry for 12 months and in particular the dairy sector. A public intervention is needed to avoid even more disastrous consequences for the thousands of companies that make up the supply chain ”, write Lactalis and Granarolo in a joint press release.

Inflation, explain the two groups, overcoming “the usual market antagonisms, has significantly affected, with double-digit numbers, almost all the cost items that make up the milk supply chain: animal nutrition (aggravated by drought which reduces both farmers’ harvests and milk production) which necessitated a almost 50% increase in the price of milk paid to farmerspackaging (paper and plastic have been increasing steadily for months), additional production components used in the production of dairy products.

Today, however, the greatest concern is represented byincrease in energy costs which in recent weeks have increased to such an extent that it is difficult to transfer them to the market, in an economically complex moment for Italian familiesthey point out.Although both companies have independently absorbed inflation that fluctuates between 25% and 30%is highlighted in the common note, from spring the price of milk for consumers has grown to reach € 1.75 / 1.80 per liter (Nielsen figure) and could increase further by December 2022.

“IS it is unthinkable that a primary and fundamental food in the Italian diet could suffer such a strong penalty as to compress its availability for consumption.As for the energies alone, if there is no turnaround, this is an inflation of 200% in 2022 compared to 2021 and a risk of over 100% in 2023 compared to 2022– declares the Chairman of Granarolo Gianpiero Calzolari – It is unsustainable even by a large company, since it lasts over time and if it were downloaded as it is on the market it would significantly affect our consumers and would have inevitable consequences on consumption, with negative repercussions on the entire supply chain.

The increase in the cost of energy on our organization has generated a devastating impact, which would have been even greater if we had not intervened with ad hoc coverings. We are talking about a + 220% of expenditure recorded in 2022 compared to 2021, and an estimate of + 90% in 2023 compared to 2022 – he claims Giovanni Pomella, CEO of Lactalis in Italy. Businesses are exhausted, they have already done well beyond their means and the time has come for public responsibility. In this dramatic situation, as entrepreneurs we have put aside market rivalries and joined our appeal to the political world to reiterate the need to act responsibly to protect the entire supply chain and the consumer.

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According to the European Commission’s Dairy Market Observatory, at the beginning of August the average price of milk paid to European producers had increased by 38.2% compared to the previous year. In June it was 494 euros per 1000 liters and in July it exceeded the threshold of 500 euros.

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The price of milk at the farm

Assolatte (an association that has over 200 processing companies that make up 90% of the Italian market) raises the alarm upstream, that is, on the price of milk at the farm that “is increasing dramatically, reaching values ​​that no one until a few months ago would never have imagined ». Last year, in these weeks, the price of spot milk (bulk in tank and sold out of contract) “was 39 cents, the milk from the stable it cost 38. Today, the first travels on values ​​above 65 cents (+ 66%) and the second has reached 57 cents (+ 50%). With the spot milk continuing its run and the contracts for the autumn that will bring the price of milk to the barn up to 60 cents “, reports the Italian Dairy Association, underlining that” the processing companies have been able to listen to the alarm raised by farmers, guaranteeing prices in line with agricultural production costs, but most of the increases remained the responsibility of those who process the milk ».

And the situation, underlines the president of Assolatte, Paolo Zanetti “is becoming truly dramatic: many companies are in enormous difficulty and are at risk of closure”. «For months Assolatte – continues the Association – has asked the Government to intervene, acting in three directions: reducing energy costs, working on excise duties and taxes and with a ceiling on gas and energy prices; reduce other production costs, simplifying the life of those who do business: a thousand laces and laces that turn into completely useless costs; and forever erasing the specter of new taxes, such as the plastic tax; reduce the impact of the increases on consumers. The zeroing of VAT on basic necessities at this point is an obligatory choice “, underlines Assolatte, recalling that gas today costs seven times as much as last yearelectricity three times, plastic increased by 78%, carton by 80%, and highlighting the surge in feed and agricultural inputs.


The article is in Italian

Tags: Price risk euros liter

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