Czech Food Prices Soar as Companies Report Record Profits

Czech consumers feel the pinch as food prices continue to rise while many food and agriculture companies report record profits. Last year’s energy and inflation crisis caused significant price hikes in foodstuffs, including bread, which rose almost a third to an average of CZK 44, and butter, which increased two-thirds to CZK 55.

While many Czechs struggle to keep up with these price increases, numerous food and agriculture companies report record profits. For example, last year, the Olma dairy company, a part of Agrofert Group, reported record profits of CZK 215.8 million, and the Hlinsko dairy saw post-tax profits more than double to CZK 163 million.

Overall, Agrofert Group, owned by former prime minister and leader of the ANO party Andrej Babiš, reported profits of almost CZK 13 billion for the last year, a year-on-year increase of 124 percent. Agrofert has a wide range of business interests, but its report mentioned that agriculture, along with the chemical industry, was one of its prosperous areas.

However, some smaller firms and sectors, such as bakeries, had a challenging year. Despite the high cost of energy and wages, food prices could increase by more than the cost of production for some companies. This is due to a lack of domestic competition, which has allowed some food and agriculture firms to raise prices more than supermarket chains, confirmed by recent antitrust investigations.

Furthermore, only a few supermarket chains dominate the market, making it difficult for smaller businesses to compete. The economist from Natland, Petr Bartoň, said that the consumer always loses out in this situation.

Apart from the lack of competition, another factor contributing to the rise in food prices is the high energy cost, and the government’s decision to cap energy prices has helped companies maintain their profits. However, according to Jan Doležal, President of the Czech Agrarian Chamber, the profits of selected companies and the sector’s economic performance last year do not reflect the structural imbalances and problems of individual sectors.

While some food and agriculture companies are thriving, many Czechs find it increasingly difficult to afford basic foodstuffs. The rising cost of living, particularly food prices, is putting a strain on Czech households, and many are calling for more action to address the increasing food prices.