Tracking EU Food Prices

March 30th, 2011
in econ_news

z ehnts  Econintersect (submitted by Dirk Ehnts):  The new tool on food prices by Eurostat (link) lets you compare the changes in the price of food in the EU. I boiled the data down to January (monthly data is available) and a selection of countries: Germany, France and the infamous PIIGS.

What I would expect from the European debt crisis, in which some countries borrowed heavily from abroad and sinking the funds into consumption, mainly real estate, to result is falling food prices in the periphery and rising food prices in the core relative to the other group.

Follow up:

This prediction is good for Spain and Portugal, which come in last. Then follows France and Germany, which is a bit puzzling. Also, the EU average is above all the national values depicted in the above graph. What is missing here, of course, is quantities. In an ideal common market, with no or negligible transport costs, prices should be equalized over all EU countries and move in tandem. Since transport costs are significant and the goods can turn bad, the data will not fit this description.

food eu

Food prices have historically been very low in Germany, especially compared to France where consumers pay a hefty mark-up. This is mostly due to culture. Where Germans of all colors are not afraid to do their shopping in discounters like ALDI and LIDL, the French consider buying food a cultural act and are therefore more willing to pay higher prices. The ALDI chain has defended itself against an attack by Wal-Mart, which moved to Germany some years back and found out it could not compete. Now ALDI is speeding up its expansion in the US, where a shrinking middle class seems ready to shift its expenditure from brand name to no- or whatever-name articles. Although spending on food is only a small part of total household expenditure, it normally defines ‘felt inflation’. As food price inflation is expected, it could be dampened by a change in consumer behavior.

Source:  eurostat

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved