Curd news: retailers and milk producers start negotiations on prices
Retail chains and manufacturers are negotiating a possible revision of prices for dairy products. Large suppliers intended to raise prices by 5-10%, and notified retailers about it. At the same time, the networks are in no hurry to accept the new conditions and continue to keep minimum markups on a number of items. The Ministry of Agriculture recognized the growth of production costs, but noted that the dairy industry is one of the most supported in the agro-industrial complex. The FAS said that they are monitoring the situation and in case of unjustified price increases they may take measures to respond. What arguments producers and sellers bring and whether it will be possible to restrain prices for the end consumer - in the material of "Izvestia".
The cost of dairy products
Trading networks are considering the notification of several major manufacturers of dairy products (milk, cottage cheese, sour cream, yogurt) on the increase in prices for their products, which is scheduled for February. Such companies as "Wimm-Bill-Dann" (trademark "Domik v rustic"), Health & Nutrition (brand "Prostokvashino", "Aktibio"), Ehrmann, "Savushkin Product", "Milk Whale" (Milk on) have sent the corresponding documents. Izvestia has familiarized itself with the letters.
The applications for increase are thoroughly checked by retail chains for reasonableness, some of them are still under consideration. Igor Karavaev, Chairman of the Presidium of the Association of Retail Trade Companies (ACORT), told Izvestia.
- Retailers do not always accept the increase in full, as well as negotiate with suppliers on the implementation of promotions and delays in acceptance. Retail prices in retail chains are indexed slower than purchase prices, so changes in prices on store shelves will be smoother, - he said.
Now retailers keep minimum markups from 5 to 10% for a number of items in the dairy category: the largest chains have reduced markups on more than 500 items of socially important goods, including sour cream, cottage cheese, ryazhenka, kefir, added Igor Karavaev. In company stores, the cost of 1 liter of drinking milk "first price" (the most budget-friendly) is about 72 rubles, which is 27% lower than the average price in the country, taking into account all formats of retail trade.
Theincrease in prices for dairy products is a forced measure, Ludmila Manitskaya, head of the Dairy Union, told Izvestia. Producers are making efforts to restrain the growth taking into account the high social importance of these goods. She added that there is a general increase in the cost of its production - on fodder, electricity, transportation costs, inflation also affects. There are also positive factors: the Mercury traceability system is working in the market, which means that it is gradually whitening, and falsification is now more and more difficult to produce. As a result, more raw materials are needed for legal production.
- If demand grows and supply does not keep up with it, the market responds by increasing prices. It is all the more important to take into account that retail chains' markup on dairy products, such as butter, often reaches and exceeds 100%, which we have already drawn the attention of the FAS. That is, the main profitability is accumulated not in the sphere of production, but in the final link of the supply chain - in trade, - she explained.
Adjustment of prices for dairy products is a consequence of the accumulated increase in the cost of production and processing of milk, noted "Izvestia" in Soyuzmolok.
- The key factor remains the growth of raw material production costs due to the rise in the price of certain components of the fodder base, energy resources, general inflation and a systemic increase in the cost of labor remuneration of hired personnel," they added.
In the processing segment, the cost of production is also increasing for all key cost items, mainly for the main item - the purchase of raw milk. The increase in raw material prices year-on-year amounted to 25%, as a result, in November 2024, according to preliminary estimates, the increase in the cost of raw milk in annual terms amounted to 9%, finished dairy products - an average of about 22%, estimated in Soyuzmolok.
Which companies are planning to raise prices
"Izvestia" got acquainted with the documents of the companies "Wimm-Bill-Dann" (trademark "House in the village"), Health & Nutrition (brand "Prostokvashino", "Aktibio"), Ehrmann, "Savushkin Product", "Milk Whale" (Milk on), which they sent to retailers. All manufacturers indicated that the cost of production is actively growing, which forces them to revise the cost of goods.
As a reason, Wimm-Bill-Dann also mentioned the weakening of the exchange rate, which affected key positions of imports. As a result, the products will jump in price by 7% or more, we are talking about cottage cheese, sour cream, milk, yogurt, a source in one of the retail chains that received the company's papers told Izvestia.
Health & Nutrition (brand "Prostokvashino") changes the cost of some products by reducing promotional discounts from February 1, the company said in documents to retail chains. Ehrmann is also revising the terms for all its partners earlier this month. They reminded that the last time they changed their prices for dairy products not so long ago - in October 2024. But since then, many types of raw materials and packaging have gone up in price. For example, milk has increased in price by 15%, protein - 32%, whey powder - 65%, cardboard - 7%. The company emphasized that "such an increase in selling prices does not fully cover the rise in the cost of finished products".
Savushkin Product" faced similar problems. The main reason is also the growth of production costs against the background of rising prices of raw materials in the fourth quarter, the company's documents say. The revision of the cost is critical for the producer, the document says, "further realization at the current prices is economically inefficient".
Ekaterinburg-based Milk Whale pointed out that the cost of raw milk for the whole of 2024 has increased by more than 45%, prices for November-December in relation to October increased by 15%, so the manufacturer is revising the selling price of goods by 10%. This figure changes for all retail chains at once.
Izvestiya's source in one of the federal retail chains emphasized that manufacturers are revising prices for dairy products, but without taking butter into account, it is no longer becoming more expensive: the cost in retail is too high for consumers.
According to Rosstat, for the year to December 2024, the average retail price of sour cream in Russia amounted to Br340 per 1 kg (+20% to December 2023), pasteurized milk rose in price by 19%, to Br89.8 per liter, butter - by 38.8%, to Br1.2 thousand per 1 kg.
The Ministry of Agriculture confirmed to "Izvestia" that the Russian Federation is recording "a significant increase in the cost of production of milk and dairy products in many areas: the cost of energy resources, equipment, machinery and spare parts, packaging, transportation costs and other components are increasing.
- The production of dairy products in our country is steadily increasing. To meet the growing demand and saturate the domestic market in 2024, manufacturers have increased the output of almost the entire product line. Thus, in January-November, over 5.5 million tons of drinking milk were produced, which is 5% higher than the figure for the same period in 2023. Other items show similar dynamics: for example, cheese (+5.7%), cottage cheese (+5.7%), cream (+15.6%), yogurt (+6.9%), ice cream (+17.3%) and so on," the ministry noted.
However, the dairy industry is one of the most supported in the agro-industrial complex, emphasized the Ministry of Agriculture. In 2023, it received 62 billion rubles, in 2024 - almost 81 billion rubles. Companies receive direct subsidies for reimbursement of costs associated with the production of livestock products, for example, per 1 kg of milk sold, for breeding stock of the main herd, for the purchase of pedigree young stock, and so on.
FAS monitors the cost of socially important goods, the antimonopoly service told Izvestia.
- Unjustified price increases are grounds for applying antimonopoly response measures," they reminded.
The agency added that earlier FAS sent requests to the largest producers of dairy products in order to analyze the validity of the price increase. Moreover, the service is already conducting inspections in this industry for anti-competitive agreements.
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