These products are more expensive in supermarkets 1:01
London (CNN Business) --
Nestle, the world's largest food and drink company, raised prices by more than 5% in the first three months of this year as it passed on rising costs to shoppers.
Consumers in North America were hit the hardest, with prices rising 8.5%, the company said in its first-quarter earnings report.
Latin America saw the second largest increase, with the price of Nestlé products rising 7.7%.
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CEO Mark Schneider noted that more increases are on the horizon.
"We have increased prices responsibly and saw a sustained consumer demand," he said in a statement.
"Inflation continues to increase costs considerably, which will require greater pricing and mitigation actions in the course of the year."
World inflation skyrockets.
Inflation of consumer prices in the US reached 8.5% in March, up to 40 years.
In Europe it stands at 7.5%, its highest level since the European Union began collecting data some 25 years ago.
Prices of goods leaving factories in Germany which feed the retailers- prices rose 30% in March from the same month last year.
That is the biggest increase in 73 years.
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Energy has been the biggest driver of inflation, but global food prices are soaring too.
Nestlé reported a 5.4% increase in total sales for the quarter and expects sales to grow 5% for the full year.
Brands such as Purina PetCare, Nescafé and KitKat were some of the biggest contributors to first quarter growth.
But higher costs could drag down profits.
The company forecasts its underlying profit margin this year to be between 17% and 17.5%, compared to 17.4% in 2021.
The war has brought the world to the brink of a food crisis
Global food prices hit their highest level on record earlier this year as the pandemic, bad weather and disrupted agriculture threatened the food security of millions of people.
The Russian invasion of Ukraine has only made the situation worse, driving up the prices of basic goods such as wheat and vegetable oils.
World Bank President David Malpass warned that skyrocketing food prices risked a "human catastrophe" in an interview with the BBC this week, saying prices could rise by as much as 37%. as a result of the war in Ukraine.
The Swiss giant withdrew some of its best-known brands, including KitKat and Nesquik, from Russia following President Vladimir Putin's order to invade Ukraine in February, but continues to supply essential food products on humanitarian grounds.
Julia Horowitz contributed reporting.
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