Germans Hit with Higher Prices Across the Board

Germans will have to dig a little deeper to overcome supply shortages and increased energy prices that are leading to higher production costs on myriad products, from their favorite beers to new cars, according to a Reuters report on Thursday (Oct. 28).

That development is likely to help companies across Germany, Europe’s largest economy, but could lead to buyers spending less on things for their homes and shrink demand, especially if workers don’t see raises as the COVID-19 pandemic continues to spread, the report says.

Munich-based Ifo Institute said Monday (Oct. 25) in its business sentiment report that half of Germany’s industrial firms are planning to boost their prices because of the supply chain snafus, higher than any other time in the nation’s history.

Germany’s consumer price inflation jumped to 4.6% for the year in October, up from 4.1% in September and at a pace never seen before in the country. German officials expect inflation to reach 3% this year, the highest level in almost 30 years, then drop to 2.2% next year and 1.7% in 2023.

Germany’s largest brewery, the Radeberger Group, plans to raise its beer prices next spring because of the rising costs of utilities, logistics and raw materials. Bars, restaurants and hotels will pay more starting Feb. 1, while retailers and supermarkets will see a spike on May 1.

Other German breweries, including Krombacher and Veltins, have also announced they will raise beer prices next spring.

BMW and other manufacturers, meanwhile, are dealing with a shortage of microchips and other electronic components that are boosting their production costs and leading to smaller discounts on their vehicles than usual, the Reuters report says.

Other German companies that expect to pass their production, material and energy increases on to consumers include Nivea maker Beiersdorf, forklift manufacturer Jungheinrich and construction material specialist HeidelbergCement. Puma expects supply chain issues to last into the second half of 2022.

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