Krynok relations: producers and trade agreed to reduce milk and butter prices
Producers have already started to reduce prices for a number of socially important goods by agreement with the trade and regulators, Izvestia has learned. The decision on discounts and rebates was taken by Molvest, EkoNiva, Renna and others. For butter they reach 15%, for milk - up to 10-15%. The FAS reported about agreements with more than 10 retail chains to limit markups, while naming those who refused to do so. Retail, according to the antimonopoly service, has expanded the range of goods for which the minimum markups will be set. All this should stabilize the situation in the market, taking into account the high inflation in the country.
On which products prices may be reduced
Thelargest producers of dairy products as a result of negotiations with retail chains and regulatory authorities have started updating the pricing policy for socially important products, a market source told Izvestia and its participants confirmed. This applies both to discounts on the most important products, such as drinking milk, and on the most sensitive to price increases category - butter. The price reduction will range from 10 to 15% depending on the product. Information about the promotions and discounts was confirmed to Izvestia by such major suppliers as Molvest, EkoNiva, Renna and others.
- Our agreement is that we will allocate a few items of goods to support socially unprotected segments of the population - pensioners, low-income citizens, etc. This will be milk in inexpensive packaging with a fat content of 2.5%, for which the price reduction will be about 10%, and peasant butter with a fat content of 72%, a reduction of 7-10%. In addition, we ask that the chains reduce their markup by about 5%," Anatoly Losev, General Director of Molvest (one of the largest milk processors), told Izvestia.
According to him, the decision to reduce prices on these goods has been made until the end of the year. Whether it will be extended depends on the development of the economic situation in early 2025.
The FAS told Izvestia that the service is already working to stabilize prices and limit the trade markup on socially important food products.
- Most of the networks of X5 group of companies ("Pyaterochka", "Perekrestok", "Slata", "Krasny Yar", "Victoria", "Pokupochka", online hypermarket "Vprok"), as well as "Auchan", "Atak", "Magnit" and "Dixie" supported the FAS proposal, saying that they are ready to expand the list of goods items with a markup limited to 5-10%- explained in the service.
They also noted that in X5 retail chains additional restrictions are valid from November 1, 2024 to February 28, 2025 in 68 regions. If earlier markups were limited to 277 product positions in 17 categories of food products, now the list has been expanded to 387 positions and 29 categories.
- The term of such commitments in the networks "Auchan" and "Atak" in 49 regions of the country is three months with the possibility of extension. Previously, the restrictions applied to 166 commodity positions in 26 categories of goods, now the number of positions has been expanded to 208, and categories - to 31, - specified in the FAS.
In the retail chain "Magnit" earlier the obligations applied to 278 product positions in 26 categories of food products in 68 regions. After the proposal of the antimonopoly agency the list of goods with a limited markup expanded to 448 items in 30 categories. Additional restrictions will be in effect from December 1, 2024 to April 1, 2025.
The Dixy chain has assumed additional obligations for a similar period. At the same time, the list of goods has been expanded from 70 items in 21 categories to 110 items in 29 categories in all regions where the retail chain operates.
- In most stores goods with limited markups will be marked with special price tags. At the same time, the networks limit markups not only for their own brands, but also for a number of common brands that are in consumer demand, - noted the antimonopoly authority.
At the same time, as reported in the FAS , "Metro", "Lenta", "Maria Ra" and "Monetka" sent information that they do not consider it necessary to accept voluntary obligations to limit the trade markup on socially important food products.
How retail chains and manufacturers limit prices
X5 Group confirmed to Izvestia that it is holding negotiations with the largest players of the dairy market to restrain prices for dairy products.
- In particular, an agreement on cost containment was reached with a number of companies : producers have pledged not to raise purchase prices for some positions of drinking milk. X5, for its part, guarantees to limit the markup on these goods until the end of the freeze at suppliers," the company said.
In the conditions of rising costs and prices, manufacturers and retail chains are trying to find optimal solutions to maintain the availability of popular goods, Igor Karavaev, chairman of the presidium of the Association of Retail Trade Companies (ACORT), told Izvestia. According to him, such tools include joint promotional activity of suppliers and chains, development of own brands, as well as retailers' price restraint on key positions of socially important products.
Large retail chains invest part of their margins in reducing the markup on first-price dairy products. In addition, they have expanded the list of dairy products sold at a low markup, including sour cream, cottage cheese, ryazhenka, kefir and others, said the business representative.
- This will be a good support for the population on the eve of the holidays. At the same time, I would like to draw your attention to the fact that raw materials have increased by 27% since the beginning of the year, and the profitability of dairy processing is usually 4-5%. And we have nowhere to compensate for these losses. That is why we are trying to do our best, but the next increase of the key rate will hit the economy of our enterprise very hard, - said Anatoly Losev from "Molvest".
In the group of companies "Renna" - the leader in the production of canned milk and ice cream in Russia - said that a series of promotions for a wide range of products in the largest retail chains in the country will be launched in the run-up to the New Year holidays.
- This year we have prepared discounts for consumers on butter and condensed milk of the Korovka iz Korenovka and Alekseevskoye brands. The action will be valid during the last two weeks of the year, - said the company. It noted that discounts on goods will average up to 10%.
The company "EkoNiva" noted that since November 1 they have already reduced prices for butter by 5% and notified retail chains about it.
- The decision was not related to the upcoming holidays. At present we see stabilization of demand for milk fats, which positively affects the availability of butter. We hope that the reduction of selling prices by the company will proportionally affect the final price of butter on the shelves, - said the company.
It also reported that the management of the group decided to fix prices at the level of September for the main dairy products, including drinking pasteurized milk, in its own retail stores (more than 80 outlets in 14 regions, mainly in district centers and small settlements).
- Suppliers of dairy products are now making maximum efforts to ensure the availability of the category on the shelf, launching promotions for the most socially important products, and imposing an embargo on the increase in selling prices," Artem Belov, general director of Soyuzmolok, explained to Izvestia.
At the same time, he noted that milk processors faced serious challenges this year.
- The costs of dairy products are increasing in all cost items. First of all, this year, the prices for raw materials have seriously increased against the background of the low base of the previous year (by more than 20% since the beginning of 2023), there was an increase in the cost of employee salaries (+40% for two years), logistics (up to 1.5 times), energy prices (annual double-digit increase in the cost of electricity) and other items, - explained the representative of the industry.
An important factor in the increase of costs in 2024 was the growth of the key rate of the Central Bank and the subsequent increase in interest rates on credit resources, including preferential, at least twice, he added.
Measures to support the dairy industry
The Ministry of Agriculture told Izvestia that the ministry is carrying out systematic work aimed at ensuring a stable situation in the food market, in particular, for dairy products. Including on a regular basis interacts with interested agencies, producers, retail chains and other market participants.
"On November 21, the Ministry held a meeting with business on the development of the dairy market. The participants of the meeting confirmed their readiness to make every possible effort to curb the rise in prices for socially important dairy products," the ministry said.
It also noted that the priority task for further stable development of the industry is to increase the production of raw materials. Its volume in Russia is growing annually. In 2024, the positive dynamics continues: the production of raw milk in January-October in agricultural organizations increased by 3.1% to the same period of 2023 and amounted to 17.3 million tons. Further growth is expected in 2025.
"The dairy industry is one of the most supported in the agro-industrial complex. By the end of 2024, support for this area may amount to about 63 billion rubles. In particular, these are direct subsidies for reimbursement of costs directly related to the production of livestock products, for example, for 1 kg of realized milk, for breeding stock of the main herd, for the purchase of breeding young stock. In addition, subsidies are provided to reimburse part of the direct costs incurred for the construction and modernization of dairy farms, as well as grant support for small farms. Another large block of measures is aimed at providing producerswith favorable investment and short-term loans", - explained in the Ministry of Agriculture.
In mid-November, after the inspection of the Prosecutor General's Office, organized on behalf of Prosecutor General Igor Krasnov, milk producers adjusted the prices of the product to the previous level. Wimm-Bill-Dann, Ecomilk and other dairy producers reportedly reduced the price.
November 27, the government allowed the regions to conclude agreements with manufacturers and retail chains to stabilize prices for any goods. According to the decree, this will allow to stabilize prices not only for socially important, but also for any other important products for people, including non-food. The changes will not affect the goods, the cost of which is regulated by the state.
