The Ukraine largest milk processors sold their products at a deficit to be on the retail chains’ shelves, and reduced each other's prices. And now they are trying to cover their losses at the farmers’ expense.
The problem of milk processors is that they worked a lot with retailers. For a long time, factories reduced each other's prices in order to gain a place on retail chains’ shelves. This statement was announced by co-owner of “Milkiland” Anatolii Yurkevych during an online meeting of milk producers and processors, initiated by the Ministry of Agrarian Policy and Food of Ukraine.
"We are faced with the fact that in response to our inquiries, retailers do not raise prices because our colleagues (suppliers of dairy products in the same chain) refuse to raise prices. Which is a strange fact for me, because if the cost of energy and production costs in general increase, you have to cover it in some other way. By their actions, such producers reduced each other's prices. This behavior is incorrect," he said.
The consequence of incorrect policy of cooperation with retail chains for all dairy processing there is a need to incur additional costs, because the price tag of finished products does not correspond to its cost. This was admitted by Chairman of the Supervisory Board of the “Dairy Alliance” Group of Companies Serhii Vovchenko during an online meeting of the Ministry of Agrarian Policy and Food of Ukraine.
"In November, the “Yahotyn Dairy Plant" paid extra 6 kopecks to retail chains for each bottle of milk, UAH5.13 for a pack of butter and UAH1.26 for a pack of sour cream. And Pyriatyn Cheese Factory for each 180-gram package of cheese payed extra UAH2.36. That is, these are our losses," Mr. Vovchenko noted.
The Association of Milk Producers explains that the problem in the dairy sector is complex one, and the main reason is not that someone does not want to enter into a dialogue, but that the dialogue is built incorrectly. We need to come to the negotiating table, operate real facts and work together in order to find the best solutions, rather than shifting the challenges of the whole industry to dairy farms.