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Italy's Supermarkets to Trim Pasta Prices

Source: Reuters
12/11/2008

Milan, Nov 12 - Italian supermarkets have agreed to trim prices of pasta for the rest of this year, bowing to pressure from the government and consumer groups, Italy's Economic Development Ministry said on Tuesday.

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Prices of Italy's main staple have been rising since last year on the back of surging wheat prices and remained stubbornly high despite a sharp fall in durum wheat prices in the second half of 2008, causing a public uproar.

Italy's biggest supermarket chains would trim pasta prices by offering discounts on some products and Christmas promotion sales and would negotiate 2009 prices with manufacturers, the ministry said in a statement.

It followed a meeting between Italy's Economic Development Minister Claudio Scajola and government-appointed price commissioner Antonio Lirosi with associations of Italian supermarkets earlier on Tuesday.

No representative from the six associations and retailers at the meeting was available for comment afterwards.

Pasta consumption ticked down 0.2 percent in Italy this year as increased prices cut the size of a traditional daily bowl of spaghetti, Italy's biggest farmers group Coldiretti said earlier this month, calling price hikes scandalous.

Supermarkets' associations told the meeting on Tuesday they have not been passing all price increases to final consumers even though manufacturers hiked prices by between 35 to 50 percent in the past 12 months.

At an average of 1.5 euros ($1.91) per kg, pasta remains one of the cheapest foodstuffs.

Parma-based Barilla, the world's biggest pasta maker, stood by its price policy and said last week its prices have risen 26 percent since 1995, well below 32 percent consumer price inflation over the same period.

Italy's pasta consumption is 28 kg per person a year, three times more than in the United States or France and 16 times more than in Japan, Coldiretti said.



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