World meat industry news

Manufacturers and distributors informed sellers about an increase in selling prices for a variety of goods from the beginning of next year - from dairy products, coffee, juices, rice to confectionery, Kommersant writes with reference to the relevant letters. Companies explain this by rising exchange rates, which affects the cost of raw materials from other countries, as well as by an increase in prices for domestic transport services by more than a third. The Ministry of Agriculture told the publication that “the situation is under special control,” adding that price fluctuations for individual products that are not produced in the country depend on exchange rates.

In particular, the Wimm-Bill-Dann company reported an average increase in prices for dairy products by 4.9%, for juices by 16.1%, and yogurt manufacturer Ehrmann by 5%. Multon Partners (formerly Coca Cola) will increase prices on soft drinks by 13%, Nestlé - on coffee and coffee drinks by 15%, confectionery - by 8%, breakfast cereals - up to 9.5%, Lyubyatovo will increase prices on cookies by 6%, Ritter Sport and Ferrero Rocher decided to raise prices on chocolate by 7-14%. And the selling price of rice from Agroimport will increase by 22%.

According to the chairman of the presidium of the Association of Retail Trade Companies (AKORT), Igor Karavaev, retail chains - members of AKORT regularly receive similar notifications from suppliers of goods in different categories. Each of them is analyzed and accepted only if there are objective grounds for adjusting the cost. “At the same time, even if an increase in the purchase price is accepted, it is not immediately transmitted to the shelf. Retail chains soften this process as much as possible for the end buyer, focusing on ensuring affordability for the most popular goods. In addition, a wide range and a significant number of promotions make it possible to maintain offers at attractive prices within basic product categories. At the same time, networks, suppliers, and the regulator are making joint efforts to prevent unjustified price increases,” Karavaev said.

Each request from manufacturers and suppliers to change prices is considered up to 30 days, Lenta explains. In this network, as in the X5 Group (Pyaterochka, Perekrestok, Chizhik), they say that they negotiate with partners to prevent price increases, and if this is not possible, then they extend the process over time.

Deputy Chairman of the Board of Rusprodsoyuz Dmitry Leonov confirms that at the moment, an increase in prices for raw materials, logistics and other material and technical resources for the production of food products is observed in many categories. All this affects the cost of production. Thus, the exchange rate since the beginning of the year has increased by 29.3% with an increase in the refinancing rate from 8.5% to 15%. Wholesale prices for durum wheat increased by 12.8% over the year, and for vegetable oil by 13.2%. Exchange prices for cocoa rose by 78.9% over the year. At the same time, members of the union note a constant increase in freight transportation tariffs and a shortage of vehicles by logistics companies due to a shortage of tractors and drivers. Thus, rates on the most popular destinations have increased by at least 35% over the year.

At the same time, vehicles with goods stand in line for unloading at some distribution centers of retail chains, often from several days to a week, which leads to additional payment by the supplier for idle transport and the generation of unilateral fines for late delivery of products both from this network and from others , Leonov said. “At the same time, the problem is the inability to quickly coordinate objective and documented price changes with retail chains. The network does not accept new prices with minimal adjustments, and if the supplier is unable to supply at a loss, he receives a fine,” he laments. As a result, manufacturers find themselves in a difficult situation: on the one hand, rising costs, on the other, the impossibility of making corrections. At the same time, the markups of retail chains have not decreased even once since the beginning of the coronavirus crisis, he emphasized.

Leonov also draws attention to the incomparability of earnings of food industry enterprises and farmers compared to retail trade. “All this ultimately leads to an explosive increase in prices on the shelf, as we see today in the example of the egg industry. Thus, the only way out is a prompt correction of prices following objective realities. This will ensure product availability on the shelf and keep growth to a minimum. And when possible, it will allow you to reduce the price of the product, as is happening today with buckwheat. After all, not a single supplier is interested in an unreasonable price increase, since this threatens him with loss of trade turnover,” Leonov said.