Groceries: “It feels like it’s all about the price”

“In Austria, over 30 years, consumers have succeeded in building up an awareness of quality when shopping and a certain patriotic purchasing behavior. That changed within a short period of time. It feels like it’s all about the price”said Franz Waldenberger, President of the Upper Austrian Chamber of Agriculture, on Monday at a press conference in Linz. The question is how long this situation will last or whether people’s shopping behavior has changed permanently.

Waldenberger and chamber director Karl Dietachmair supported these developments with figures from AMA Marketing: According to this, quality was the top priority for 60 percent of those surveyed when it came to food in 2021. In 2023, the price was more important for 58 percent.

The debate about overpriced food, which really gained momentum last year, would not correspond to economic reality: According to Eurostat analysis, food prices in the EU rose by an average of 29 percent between 2020 and mid-2023. In Germany it was 32 percent in the same period and 24 percent in Austria. Food has become more expensive, says Waldenberger, but the increase is below average compared to the EU. At the same time, in Austria only around eleven percent of household income is spent on food, a value that has remained almost the same over the years. For comparison: For the EU leader Romania it is 25 percent.

With the pig farmers and the cattle fatteners, Waldenberger made two “Problem children” from local agriculture: “Investment activity has been extremely subdued for some time.” The reasons are increasing market requirements with regard to husbandry methods and also the sharp increase in construction costs. There is also legal uncertainty: “Investments often amount to more than one million euros. But there is no certainty as to whether these will still be up to date in five years or whether further investment will be required.”

Dietachmair also cited the transition period for the ban on fully slatted floors in pig farming, which would originally have run until 2040, as an example. Yesterday this was overturned by the Constitutional Court with the argument that it was too long (more on that here). What happens next is not yet clear: “This unsettles farmers.” There is a need for more security and additional incentives to promote investment.

Germany: Massive protests

In Germany, one drop was the straw that broke the camel’s back, said Waldenberger, when asked about the massive farmers’ protests in Germany: The farmers’ association there started a week of action with protest measures, which resulted in massive traffic disruptions. The trigger was a planned funding cut, which has now largely been revised. But that hasn’t reassured farmers (you can read more about this here).

There is also great dissatisfaction in Austria because the economic situation has deteriorated in several production sectors in 2023, especially in agriculture and forestry.