Representatives of Ukrainian baby food producers have proposed that the upper restrictions on margins and markups of baby food should be canceled and the sector in Ukraine should be supported by the state.
The relevant resolution was signed by participants of representatives of producers after a meeting as a part of a roundtable entitled “Baby Food in Ukraine. What hinders the fully valid development of the domestic sector?” in Kyiv on Thursday.
“These should be canceled. We should switch to a market mechanism – only the market will allow earning [profits] and investing in the dairy sector,” Vadym Chaharovsky, Chairman of the Union of Dairy Companies of Ukraine and Director General of Bila Tserkva Dairy Factory (Tomylivka, Kyiv region), said.
He said that the state could provide subsidies to the producers of ecological raw materials to produce baby food to stimulate production of competitive products on the market.
Director General of Vitmark-Ukraine JV (Odesa region), Viktor Stanislavsky, said that the restrictions in the markups and margins for baby food (maximum 25%) are set by regional administrations using an unclear mechanism, and it differs from the region to the region.
“There are several regions where there are no restrictions [on markups] on imported baby food, for example, Kirovohrad, Sumy, Rivne an Lviv regions,” he said.
Director General of OJSC Khorol Dairy Baby Food Plant (Poltava region) Andriy Fedotkin said that the fall in the level of markups leads to the unwillingness of retail chains to cooperate with Ukrainian baby food producers, due to low profits, and they offer shelves to importers.
“If there is a necessity to restrict markups, it should be more fixed and grounded, it should be minimal and should apply to all goods, not only Ukrainian-made ones, but also imported food, so competition could be seen,” he said.
According to the Ukrkonservmoloko national association, the share of sour milk and baby food made in Ukraine is almost 100%, that for fruit sauces 40%, powder mixtures 36%, juices 30%, and powered porridge 17%.
