The bread market in Ukraine is being monopolized: the price is growing at an accelerated pace
Small bread producers are disappearing in Ukraine, and as a result, the remaining large market players will begin to dictate prices, warns the director of the Ukrainian Association of Retail Chain Suppliers, Alexey Doroshenko.
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“The price of bread is growing at a faster pace than the increase in the price of raw materials. If we look at the retail price of flour, at flour indices from manufacturers, we will see that bread is rising in price approximately twice as fast as the main raw material - flour.
That is, factors such as electricity, profitability, and wages influence.
In December, I had a discussion with colleagues in the baking industry about how much bread could grow. Back in September 2016, the position of the baking industry was stated that there could be a 20% increase in the price of bread. The second time was in December 2016. And I had to talk about a possible problem with bread for the first time back in June 2016. Then I said that the state does not pay attention to the fact that the bread production market is being monopolized.
If previously there were many small producers in many areas, today we have 2-3 players in many areas. There are no small ones anymore. They could not withstand the competition or stopped due to the fact that our grain industry was one of the most profitable.
Major players are starting to conquer regions. Sometimes there are literally two players in a region. We may come to a situation where there will be 3-5 major players in the entire Ukrainian market, who will dictate the price. Unfortunately, the state does not pay attention to this,” the expert said at a press conference in Kyiv.
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