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why the price of animal feed will soar in 2023

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Romain Rouillard
6:51 p.m., November 29, 2022modified to

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7:08 p.m., November 29, 2022

A few weeks ago, Michel-Édouard Leclerc, the boss of the large distribution centers of the same name, warned of a probable price increase on a whole myriad of products in the months to come. For animal feed, the increase demanded by producers from distributors exceeds the 40% mark.

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In 2023, feeding your cat or dog risks becoming a real luxury. Particularly affected by the inflationary wave, animal feed could experience a real surge in the course of next year. A few weeks ago, Michel-Édouard Leclerc, the boss of the eponymous centers, reported that animal food producers were demanding that large retailers apply a 41% increase in dedicated shelves. That’s twice as much as any other commodity.

For Olivier Dauvers, a journalist specializing in mass distribution, this announcement is not surprising. “The effect of inflation is twofold for animal feed because it requires the two products that have soared the most recently: cereals and the noble part, namely meat. Poultry has experienced an increase of approximately 40%”, he underlines to Europe 1.

A highly concentrated market

Moreover, the manufacture of these products requires a high consumption of energy. “They must be extremely heated because it is necessary to homogenize very different products from each other. It is therefore a particularly energy-intensive activity”, indicates Olivier Dauvers. Given the surge in the price of electricity, the cost of producing a packet of kibble is logically revised upwards.

And distributors will probably have no choice but to pass on this surge to the selling price due to the concentration of this market, controlled by a small number of agrifood giants. We can mention in particular the Swiss Nestlé or the Americans Mars and Unilever. A situation that offers these players much more latitude to impose their tariff revision. “The more distributors resell strong brands like these, the lower their margins will be,” summarizes Olivier Dauvers.

An increase effective March 1, 2023

As a result, large retailers will not be able to both cash in on this price increase and preserve consumers’ wallets. However, the 40% increase demanded by manufacturers from large retailers will certainly be lowered. “The negotiations will go through there”, tempers Olivier Dauvers who expects a final price inflated by “20 to 30%”. A new pricing which will only be effective from March 1, 2023. “I therefore advise to stock up”, concludes the specialized journalist.

Source: Europe1

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