Filling China’s stomach has become increasingly costly of late, but food providers have ways of clawing back. I am essentially a very lazy person, and so once a month I order a pepperoni pizza for delivery. I have done so since I first discovered the joys of home delivery sloth during SARS, so 10 years of a monthly pepperoni pizza (about 120 in total) leaves me eminently qualified to tell you that since food inflation kicked in, not only is pizza more expensive but there are decidedly fewer little round bits of spicy meat on top! And that’s how fast food chains are managing to expand their revenues despite upwardly mobile ingredient costs.
The other way to keep the profits rolling during inflationary times is to make sure the “sell by date” is never reached. And should that dreaded date loom, it seems that managers at both domestic and foreign supermarkets simply grab their Magic Markers and change it! In management speak, an awful lot of meat is constantly “going forward” these days. So take my advice: If you can’t purchase your dinner in a live state (the ultimate proof that it’s not past the sell date), make sure you avoid meat with a greenish hue. And if you haven’t already, quit smoking. Never has a keen sense of smell been so crucial when perusing the supermarket aisles.
If you ever believed there was any organic food in China then hopefully the recent scandals at Wal-Mart in Chongqing have disabused you of this naïve and ridiculous notion. We all remember 2008, when Olympic athletes had special pork supplies imported to avoid ingesting the nembutal steroids guzzled (willingly or not) by those of us outside the Olympic Village. Without those special pigs, Beijing 2008 could have spiraled into a failed-dope-test disaster, in the end becoming a clash between those mighty non-pork-eating sporting nations of Israel and Saudi Arabia. Years later, nothing much seems to have changed. I’m left wondering if my emergent man-boobs are a consequence of hitting my mid-40s or 20 years of eating steroid-stuffed Chinese pork.
Chinese economists have discovered a new word – “prudent” (wenjian). With inflation easing at the end of 2011 and Beijing not yet seeing the need for further stimulus, we are to get a “prudent monetary policy” in 2012, meaning a bit of moderate easing all round. But where on earth did they get this term “prudent” from? To my knowledge, the only leader to use the term and visit China was the canny British Prime Minister Gordon Brown, who loved to bandy about the term when he was Chancellor of the Exchequer. Of course, while being prudent, Brown proved to be a rather poor prime minister and was thrown out by the voters. That’s where prudence got him – we’ll see where it gets Beijing.
And so we head straight out of Christmas and into the Chinese New Year – the two mega-moments of the retail calendar barely a month apart. Beleaguered manufacturers finally saw energy and raw material prices drop in the last weeks of 2011, but it was too late for cheaper goods to make the shops by Christmas and CNY. The other thing about Christmas and CNY being so close is that prices (which go up during holidays) will stay higher for longer. Meanwhile, more people will stay at home earlier in the year when it’s colder, meaning higher household fuel bills. Guess what that could give us in the first quarter of 2012 – the return of inflation!
Paul French is chief China representative of Access Asia-Mintel