Ahead of the holiday season and with increasing pressure on families caused by the food price crisis, research sheds light on the alarming realities of current price rises. The study, titled “Who is profiting from the food crisis? Speculation, rent-seeking and rent-extraction in our food sector,” is authored by Dr. Sophie van Huellen (Senior Lecturer in Development Economics at the University of Manchester) and Dr. Tomaso Ferrando (Professor at Faculty of Law, University of Antwerp).
- Speculation-Driven Price Surge: The study uncovers that food price increases are not a result of natural market forces but are driven by rampant speculation, leading to “greedflation.”
- Corporate Profits at the Expense of Consumers: Major corporations, including Nestlé and Danone, are reaping extreme profits amid the crisis. Nestle, for example, disbursed a total of €20.1 billion to shareholders in 2022.
- The study exposes their role in exploiting market conditions to the detriment of consumers.
- Rigged Food System: The food system is a racket, benefiting massive corporations and hedge funds while adversely affecting consumers and farmers.
Co-President of The Left in the European Parliament, Martin Schirdewan (Die Linke, Germany) says:
“This study reveals the winners from the food price crisis. While millions haven’t been able to afford basic foodstuffs for months, major food companies like Nestlé are making huge profits. High prices particularly impact people with low incomes, as they must allocate a significant portion of their income to food. It is now nearly impossible for many to maintain a healthy diet. The long lines at food distribution centres across Europe illustrate this daily.”
The study urges policymakers to address the root causes of the crisis, advocating for measures that ensure fair pricing, transparency, and equitable distribution within the food sector.
The full study “Who is profiting from the food crisis? Speculation, rent-seeking and rent-extraction in our food sector” is available here.