so, whether it s the grains corridor or exports flows, that can continue to be fraught with risk. and the final thing is the other producing regions, you know, we are seeing some sort of climate change, unfortunately, which does create havoc across the world, particularly tropical countries. so, whether it s floods or droughts, inevitably you re going to see some of that in some key producing region. and i think that, again, may affect the supply side. so, bottom line, unfortunately, i think prices are not likely to get back to levels we saw pre 2019, the pre covid levels because the whole world has structurally changed. costs are higher, inflation is here, the cost of processing and shipping things are high. so prices may come off a little bit, but we re not going to go back to levels we saw five years ago, for example. so, kona, i mjust wondering, do we as consumers who, let s be frank, have been used to pretty cheap food for some years, do we have to just now get used
if shrinkflation is effective depends very much on the perceptual threshold. so, for example, in weight, if i compare two weights, i need at least two grams of difference for 100x100 grams to perceive that difference at all. now, over time, that becomes more, so i maybe forget that last week, you know, that carton of milk or that little piece of tea or so was slightly heavier than this week. so, companies understand what the perceptual threshold for the different units is, they have good chances to make shrinkflation successful. kai, are retailers, are they nervous about raising prices? oh, yes. that is a big issue.
written the book on this. it s called the invisible game: the secrets and the science of winning minds and winning deals. kai markus mueller, a real pleasure having you on this show. and, kai, let s start with this. what are some of the tips and tricks that retailers use? well, there is a wealth of them in consumer psychology. but i ll tell you a few of them. a very, very, very strong component is, for example, the default effect. so, for example, if you have a subscription, it renews by default, and we have trouble thinking about the renewal, wejust let it go. then there are things like red signs for discounts. people have learned these things, over and over that red signs give you pleasure. people believe that they get a good deal, despite the fact that they are actually playing a game that is set by the company that sells these products. and, kai, i m wondering,
and we got many example in all europe of tough discussion between trade and, you know, fast moving goods company. i think that we always have been very reasonable in the last three orfour years in the relationship with the trade, knowing that there is the right limit and the right balance sheet for them, for us, and the right threshold where the two faces can start talking to each other. so i would say it s a very tough discussion, but probably thanks to our past years history, and the credibility also that we got on the market, we have always been able at the end to find the right solution with them, but not an easyjob. but these retailers, they often have their own brands. i m just wondering, is that a big plus for them when negotiating?
and very sell the products to consumers. so i would say that it s very, very tough discussion for sure. and we got many example in all europe of tough discussion between trader and, you know, fast moving goods company. i think that we always have been very reasonable in the last three or four years in the relationship with the trade, knowing that there is the right limit and the right balance sheet for them, for us, and the right threshold where the two faces can start talking to each other. so i would say it s a very tough discussion, but probably thanks to our past years history, and the credibility also that we got on the market, we have always been able at the end to find the right solution with them, but not an easyjob.