- Nestlé raises prices by 6.5 percent in the first half of 2022. Company cites an “unprecedented” cost increase.
- Food prices have fallen for three months in a row, though they were still 23 percent higher in June than a year ago.
- The World Food Programme estimates 47 million people are facing acute hunger.
Nestlé raised its prices by 6.5 percent in the first half of 2022 in response to a “unprecedented” cost increase.
Nestlé said in a statement Thursday that the world’s largest food company raised its prices the most in North America (9.8 percent), followed by Latin America (9.4 percent).
Nestlé (NSRGF) reported that rising commodity, packaging, freight, and energy costs weighed on the company’s operating profit margin.
“Through disciplined cost control and operational efficiencies, we limited the impact of unprecedented inflationary pressures and supply chain constraints on our margin development,” CEO Mark Schneider said in a statement.
Despite higher prices, the company, which owns KitKat and Nescafé, increased organic sales by 8.1 percent during the period, owing to strong demand for its Purina pet food products.
Global inflation has driven up costs for the world’s largest manufacturers, which have then been passed on to consumers. Unilever (UL), a competitor of Nestlé, announced on Tuesday that it raised its prices by an average of 9.8 percent in the first six months of the year.
Higher prices have also exacerbated global food insecurity, which has been exacerbated by Russia’s invasion of Ukraine in February. The war has driven up the price of energy and staple commodities to all-time highs, putting pressure on poorer countries that rely on imports.
There is some good news: global food prices have fallen for three months in a row, according to the UN Food and Agricultural Organization’s Food Price Index, though they were still 23 percent higher in June than a year ago.
The World Food Programme (WFP) estimates that the Ukraine war has pushed 47 million people into a state of acute hunger.
Russia and Ukraine signed an agreement last week that will allow grain and oilseed exports from Ukrainian Black Sea ports to resume after months of disruption.
[embedpost slug=”/biden-touts-senate-spending-deal-as-key-to-facing-up-to-inflation-climate-change/”]
