The Ukrainian baking industry operates in a highly competitive environment with low profitability, according to Oleksandr Taranenko, president of the All-Ukrainian Bakers Association.
“We bakers only know about 10% profitability from stories. Most companies operate with a margin of 5%, and sometimes even lower. At the same time, costs are constantly rising. For example, the rise in electricity prices has added 1% to the cost price, and this increase cannot be immediately passed on to the price – it takes months,” he said.
According to him, this is why forecasts of a 15-20% increase in the price of mass-market bread are not related to manufacturers’ desire to increase profits, but to the need to compensate for increased costs.
“Bakers are forced to raise prices. This is not an attempt to make a profit, but an attempt to survive. When production costs rise and prices cannot be changed quickly, companies simply go into the red,” Taranenko emphasized.
