Rapid Increase in Wholesale Costs - Prices for Coffee and Sweets Skyrocket
In recent months, consumers in Germany have experienced a rise in prices for food, beverages, and tobacco products. According to the Federal Statistical Office, wholesale prices for these items increased by 0.9% compared to the previous year in June 2025.
The significant increase in wholesale prices for food, beverages, and tobacco—especially coffee, tea, cocoa, spices, and confectionery/sweets—can be attributed to a combination of factors.
Coffee, tea, cocoa, and spices saw the largest increases, with prices up by 26.2% in June 2025 compared to June 2024, and an even higher jump of 38.4% in May 2025 compared to May 2024. Sugar and confectionery/bakery products also surged by 17.1–18.2% year-on-year. Dairy and edible fats/oils were up by approximately 8.8–8.9%.
Non-ferrous ores, metals, and semi-finished products also contributed to wholesale price inflation, with increases as high as 20.5%.
The underlying causes for these price increases include supply chain disruptions and weather events, global commodity market volatility, increased production and logistics costs, domestic consumer and wholesale price trends, and market speculation and inventory management.
Adverse weather conditions in major producing countries, such as drought in coffee-growing regions or unfavorable harvests for cocoa, have constrained global supply, leading to higher prices. International markets for coffee, cocoa, and sugar have experienced volatility due to reduced supply, export restrictions, and increased demand. Higher energy, labor, and transportation costs continue to contribute to rising prices across the food and beverage sector.
While consumer food inflation in Germany is lower, wholesale prices for specific commodities and processed goods have risen much faster due to the pass-through of input costs. In some cases, inventory adjustment and speculative trading in commodity futures can exacerbate price swings.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, stated that the wholesale prices indicate that general inflation will remain low. However, consumers may continue to feel the impact of these price increases in their day-to-day spending.
The structural downward trend in prices for data processing and peripheral equipment continues, with prices for computers or smartphones decreasing by 5.0%. The possible reason for the decrease in mineral oil products could be the weakening global economy. Asian suppliers may be targeting the European market more strongly due to trade barriers.
Inflation has eased recently, with consumer prices for goods and services rising by 2.0% year-on-year in June. From May to June, wholesale prices rose by 0.2%. Wholesale prices are seen as a key indicator between manufacturers and consumers.
*Sources: 1. Statistical Release on Wholesale Prices, Federal Statistical Office; 2. Monthly Report on Wholesale Prices, Federal Statistical Office; 3. Press Release on Wholesale Prices, Federal Statistical Office; 4. Consumer Price Index, Federal Statistical Office.*
- The Galaxy community is considering implementing a policy adjustment, as the rising prices in the food-and-drink industry, especially coffee, tea, cocoa, and sugar, have challenged the employment policy of many businesses, potentially impacting the lifestyle of their employees.
- The finance department of various companies should be aware of the impact rising wholesale prices of food-and-drink items, such as coffee, tea, cocoa, and sugar, could have on their employment costs and spend more time analyzing industry trends to make informed decisions.
- With the inflation in wholesale prices of certain food-and-drink items, like coffee, tea, cocoa, and sugar, businesses might want to revise their policies regarding employee benefits, such as providing meal vouchers or adjusting company food subsidies, to help alleviate the financial burdens experienced by employees due to rising living expenses.
