We deliberately compensate marginality at the expense of profit, and not through increase in prices – GC Losevo
- The demand for milk-containing products is growing, a significant part of buyers choose a cheaper product. This is understandable in the current economic situation in the country. At the same time, there is also an audience that is ready to choose a more expensive, but natural, high - quality product,’ the press service noted.
The company believes that the increase in food prices is due to a change in the exchange rate, and therefore, from the beginning of the pandemic to the present day, there has been an increase in prices for feed ingredients, packaging, fuel and components.
According to the representative of the press-service, the need to re-equip production lines for labeling also carries serious costs. Price changes are also affected by a decrease in purchasing power, since the projected price level, which is laid down when building a financial model before the pandemic, does not coincide with reality.
‘The last price increase for our products was back in June 2020. We are currently working to maintain current prices. The company takes measures to optimize costs, including both the reorganization of production processes and the reduction of overhead costs, the press service said.
GC Losevo said that due to the increase in the cost of products, marginality is reduced, but the company deliberately compensates at the expense of the profit, and not through increase in prices. According to the representative of the press service, today it is necessary in order to remain competitive.
The company added that at the moment it is difficult to predict further price regulation by the state and its consequences.
‘The previous year clearly showed us how everything can change in a matter of months. Most likely, the cost of production will continue to grow in the near future, so the measure of artificial restraint of food prices may be ineffective from the point of view of the principles of economics. State regulation of food prices makes sense only in the complex, including the regulation of prices of suppliers of raw materials, equipment and other things, as well as the control of wholesalers and intermediaries, subsidizing producers,’ summed up in the press service of GC Losevo.
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