FT: Pasta producers in hot water over soaring prices

European pasta producers are facing growing pressure to lower prices as simmering tensions surrounding the rising cost of fusilli, spaghetti and other household staples threaten to boil over.

Italian consumer groups have asked competition authorities to look into the possibility of price collusion and called for shoppers to shun products in a “pasta strike”, while the French government has threatened food producers with financial sanctions if they do not lower prices, Financial Times reports.

The rise in pasta prices is far outpacing broader inflation in parts of the region and has continued despite a sharp drop in the cost of the wheat used to make it.

Manufacturers, which include Barilla, De Cecco and La Molisana in Italy and Panzani in France, insist that their pasta is priced fairly, with recent rises reflecting the impact of higher manufacturing and other input costs following Russia’s invasion of Ukraine.

But they have been accused of profiteering and “greedflation” as shoppers wonder why they are still paying so much.

“Reality is far different from [the manufacturers’] narrative,” said Italian consumer group Codacons. “Year-on-year price hikes measured on a monthly basis are two times the current rate of inflation.”

Pasta consumed in Europe is made primarily from Canadian durum wheat imported largely to Italy, the world’s biggest producer.

Extreme heat and drought in Canada in 2021 led to a sharp drop in production and sent the price soaring. It has been decreasing steadily since December that year but rose slightly this month after the collapse of Ukraine’s Kakhovka dam hit global wheat markets, according to commodities research group Mintec. Although down more than 40 per cent from its peak, the price of Canadian durum remains 18.8 per cent higher than in June 2021, before the price spike.

Facing accusations of using inflation as a cover to raise prices, pasta makers point out that wheat is only one of many volatile costs throughout their products’ journey from field to plate.

The discrepancy between the cost of wheat and the eventual sticker price goes to the heart of a tussle playing out among food groups, retailers and politicians.

With food prices having overtaken energy as the primary driver of inflation across Europe, producers are under particular pressure to lower them after groups such as Nestlé, Unilever and PepsiCo reported healthy quarterly earnings, having passed on higher costs to consumers.