Rip-off instead of inflation: Some manufacturers turn the price screw disproportionately
Created: 12/21/2022 5:17 am
By: Patricia Huber
More and more companies are increasing the prices of their products.
But that would not always be necessary.
One economist warns that some are simply taking advantage of inflation.
Munich/Dresden – Ten percent inflation: The effects of the rising inflation rate are clearly noticeable when you go to the supermarket every week.
In 2022, prices have risen enormously in many areas.
Food in particular has become extremely expensive in recent months.
But are the price increases by companies always absolutely necessary?
Or are consumers being ripped off here?
Exploiting inflation: Some companies raise prices more than necessary
One thing is clear: every company has to pay significantly more for energy such as electricity and gas than it did a year ago.
With the increase in the minimum wage, personnel costs have also risen in many companies.
Depending on the industry, some companies then also struggle with higher raw material prices.
But that doesn't always justify the sometimes drastic price explosions that finally hit the end consumer.
This is emphasized by Joachim Ragnitz, deputy head of the ifo branch in Dresden.
Companies seem to have "used the price increases in some sectors of the economy to expand their profits," Ragnitz makes clear.
This applies in particular to agriculture and forestry, including fisheries, construction, trade, hospitality and transport.
Here, according to Ragnitz, “companies have increased their prices significantly more than would have been expected based on the rise in wholesale prices alone.
Some companies seem to be using the increase in costs as an excuse to improve their profit situation by raising their sales prices.”
Increased prices: deadweight effect observed for some products
The higher prices are understandable for numerous products.
But there are also exceptions.
"There are drugstore items where you can't necessarily understand it," explains Sven Reuter, developer of a price comparison app, to
SWR
.
For example, the price of a soap has even risen by 90 percent.
This is referred to as a so-called deadweight effect, i.e. that manufacturers raise prices disproportionately even though their production costs have hardly increased.
However, Ragnitz does not consider state intervention in pricing to counteract this phenomenon to be appropriate.
It is enough for consumers to buy cheaper products to curb profit inflation.
(ph)
Our free business newsletter provides you with all relevant business news on a regular basis. Click here for registration.
