The companies that have achieved the highest profits after the sudden rise in food prices in 2022? According to a new study cited by RetailDetail, these would not be supermarkets, but rather a limited number of powerful food producers that operate globally.

Lower profits for supermarkets

Farmers, consumers, and politicians have recently pointed fingers at supermarkets in response to the sudden rise in food prices.

They were wrong to do so, according to economist Olivier Malay from the Université libre de Bruxelles (ULB). He examined the annual accounts of thousands of companies to find out who benefited from price increases and told the Belgian newspaper De Standaard that supermarkets did not benefit from high inflation.

His study, published by the think tank Minerva, makes it quite clear: supermarkets saw their sales increase sharply, but their costs increased even faster.

Indeed, suppliers have practiced higher prices, while energy, transportation, rent, and labor have also become more expensive. As a result, their profits in 2022 were even lower than in previous years.

Market power pays off

The situation is different among Belgian food producers: up to 46% of them recorded higher profits in 2022. Among the top 200 companies in the sector, profitability was more than a quarter higher than in the last four years.

Seven producers even recorded exceptionally strong profit increases: potato processor Clarebout Potatoes, for example, recorded an operating profit of 167 million euros in 2022, up from an average of 1.3 million in the last four years.

This is an increase of almost 6000%... Agristo and Lutosa, starch producer Tereos, pasta producer Soubry, Tiense Suiker (sugar refinery), and the Belgian division of Cargill also recorded much higher profits.

How did they manage to do this?

They have a lot of market power, according to Malay, and they are not afraid to use it. In other words, they were able to easily pass on the increased prices of goods to their customers, which helped them increase their margins.

The expert cited emphasizes that the four largest commodity suppliers (ADM, Bunge, Cargill, and Dreyfus, also known as the ABCD group) doubled their profits to thirteen billion dollars in two years, partly thanks to speculation.