About meat is essential: why prices are rising

20/ 09/ 2017

About the rise in food prices now does not speak only lazy. The public pays special attention to the growth of prices for socially significant goods, namely meat. This is not surprising - meat is an important part of the daily diet of a Ukrainian, so buyers are very sensitive to any price fluctuations. And, as a rule, visitors to supermarkets are often the first to blame retailers for rising product prices. But is it so? Retail perfectly understands that chicken, pork, beef and other types of meat are socially important goods, which are also markers of the competitive environment between retail chains. And market competition does not allow to raise the mark up on these goods. Talking to other companies - members of the EBA Retail Trade Committee, I can say that today the mark up on chicken meat and other types of meat in the retail chains ranges from 10 to 15%. Since industrial production accounts for 98% of the total production of chicken meat in Ukraine, most questions arise precisely to them. Thus, for example, in July-August there was a sharp jump in prices for chicken meat, which was quickly reacted by the Antimonopoly Committee of Ukraine (AMCU) and began consideration of this issue. Together with colleagues in the Committee, we have already held a number of meetings with the leadership of the Antimonopoly Committee, where representatives of other state bodies and the producers themselves were present. And they gave the necessary clarification. Thus, producers of rising prices explain, firstly, the growth of production costs - the increase in prices for feed, energy tariffs, and the increase of wages to skilled personnel to a competitive level. Also, one of the factors affecting the final price of products is the price of veterinary drugs. Most of them are imported because of the lack of registration procedures for GMOs. Which, in fact, make up the basis of veterinary drugs and significantly increase the cost of production. In addition, producers report an increase in exports of poultry meat this year, which may lead to shortages of products in the Ukrainian market, and in the long run, and before the transition to the purchase of imported meat. Plus, retailers note an increase in demand for chicken meat after rising prices for beef and pork. The latter was due to the strong inflation of prices for these types of meat after the reduction of the stock of cattle and mass destruction of animals due to the spread of African swine fever. Now the same situation is with chicken. But which mark will the prices be directed to and will it be possible to balance the price situation in this market? Only the AMC will be able to answer this question. And, hopefully, in the near future. Source: Novoe Vremia

About the rise in food prices now does not speak only lazy. The public pays special attention to the growth of prices for socially significant goods, namely meat.

This is not surprising – meat is an important part of the daily diet of a Ukrainian, so buyers are very sensitive to any price fluctuations. And, as a rule, visitors to supermarkets are often the first to blame retailers for rising product prices. But is it so?

Retail perfectly understands that chicken, pork, beef and other types of meat are socially important goods, which are also markers of the competitive environment between retail chains. And market competition does not allow to raise the mark up on these goods. Talking to other companies – members of the EBA Retail Trade Committee, I can say that today the mark up on chicken meat and other types of meat in the retail chains ranges from 10 to 15%.

Since industrial production accounts for 98% of the total production of chicken meat in Ukraine, most questions arise precisely to them. Thus, for example, in July-August there was a sharp jump in prices for chicken meat, which was quickly reacted by the Antimonopoly Committee of Ukraine (AMCU) and began consideration of this issue.

Together with colleagues in the Committee, we have already held a number of meetings with the leadership of the Antimonopoly Committee, where representatives of other state bodies and the producers themselves were present. And they gave the necessary clarification.

Thus, producers of rising prices explain, firstly, the growth of production costs – the increase in prices for feed, energy tariffs, and the increase of wages to skilled personnel to a competitive level.

Also, one of the factors affecting the final price of products is the price of veterinary drugs. Most of them are imported because of the lack of registration procedures for GMOs. Which, in fact, make up the basis of veterinary drugs and significantly increase the cost of production.

In addition, producers report an increase in exports of poultry meat this year, which may lead to shortages of products in the Ukrainian market, and in the long run, and before the transition to the purchase of imported meat.

Plus, retailers note an increase in demand for chicken meat after rising prices for beef and pork. The latter was due to the strong inflation of prices for these types of meat after the reduction of the stock of cattle and mass destruction of animals due to the spread of African swine fever. Now the same situation is with chicken.

But which mark will the prices be directed to and will it be possible to balance the price situation in this market? Only the AMC will be able to answer this question. And, hopefully, in the near future.

Source: Novoe Vremia