The Russian invasion of Ukraine has not only affected European security. It has also severely impacted the cost of living.
In Europe, prices for food and drink rose more in 2022 than ever before, with customers paying 10-15% more for products than the previous year. Inflation is set to continue through 2023.
Banana storage costs are now five times higher
Bananas, Luxembourg's favourite fruit, are set to become more expensive due to energy costs. The fruit is often kept in cold storage to ripen before it is placed in stores, which is becoming ever more expensive. Christophe Vandenbroeck, director of a cold storage site, explained that pallets of the fruit arrive in Anvers from Costa Rica and are kept in storage for 5-6 days before being shipped to supermarkets.
Some 90,000 crates of bananas pass through Belgium's cold storage sites every week, arriving green and ripening to yellow before they're sent on to clients such as supermarkets. The cost of keeping these bananas cool is now five times higher than it was last year, Vandenbroeck said. Last year's energy bills hit around €350,000 - now, based on tariffs for the first quarter of 2023, Vandenbroeck predicts they will hit at least 1.6 million euros.
Luxembourg grocery prices to soar in 2023
An increase in raw materials due to the pandemic, difficulties with energy reserves and fertilisers due to the war, network problems due to the climate crisis - all these factors are having an impact on grocery costs. Whether bananas, salad, fish or Luxembourgish beef, 2023 will see food prices soar in the Grand Duchy. Meat prices are expected to jump up by around 20%, while fruit will experience a short-term seasonal increase of up to 50%. Jo Studer, a Luxembourgish food supplier, said a number of suppliers in the Netherlands and Belgium had stopped producing over the winter, closing greenhouses due to unsustainable gas and electric costs. "With the lack of production, there is naturally a shortage on the market, so prices will go up."
Difficulties exacerbated in the winter season
The situation is expected to improve in the spring, when the market in southern Europe gets going once more. Studer says this will calm down erratic prices for some products. But even "Made in Luxembourg" products are becoming more expensive, such as meat.
Studer explains: "Prices are determined abroad. For example, for pork, Germany dictates market costs and Luxembourg orientates itself towards Germany when it comes to pricing products. As long as the Ukraine conflict and the energy crisis persist, these prices will not fall."
End consumers must therefore adapt and turn to other products, Studer says.
Video report in Luxembourgish: