Blow to the confectioners - a blow to the consumer!

Sea 18 2013 published c earnings

products & Ingredients №3 (100) March 2013

What are the challenges and prospects of Ukraine carries confectioners year 2013th? Why inflamed relations with manufacturers and retail chains who took the place of Ukrainian caramel in Kazakhstan - "P&And "he told President of the Association of Ukrainian confectioners' Ukrkondprom "Alexander Baldynyuk.

– Alexander Vasilevich, What are the main indicators of the confectionery market has entered in the 2013th year? What is the reason the growth and "sagging" of certain segments of the market?

– In 2012 году в Украине было произведено 1 073 thousand. тонн кондитерских изделий, what is 100,24% от общего объема производства в 2011 year. However, production volumes in kondizdely 2012 year still fell 1,4% with respect to 2010 year.

Overall, the past year is characterized by strengthening the competitiveness of Ukrainian enterprises in the domestic and foreign markets. One factor, contributed to this, - introduction at the enterprises of advanced international quality management systems and food safety, modernization of production lines and installation of innovative highly automated equipment, which in combination can improve performance and reduce energy consumption of production.

Companies expand the range of products. Over the past year the Central Tasting Commission to assess the quality of confectionery products were approved more 400 new products.

The candy production segment extends drop. This is mainly due to the complexity of the work on traditional foreign markets of the products. In November 2011 года Таможенный союз ввел специальную пошлину размером $294,1 per ton of production against imported into the territory of TC caramel. As a result,, kondizdely export sugar from Ukraine to the Customs Union countries 2012 fell nearly 18%, while production fell by 4%.

Of special mention is the action of Kazakhstan, which unreasonably imposed special duties on imports and caramel, and chocolate products (at the rate of 49% of the customs value of goods). As a result, supply kondizdely from Ukraine to Kazakhstan 2012 year fell 40%. Notably, that Ukrainian niche in Kazakhstan did not fill the local producers, and Russian.

In July last year, the Interdepartmental Commission on International Trade of Ukraine recognized the actions of Kazakhstan are discriminatory and unfriendly. surprisingly, but other effective steps our government regarding the settlement of this issue with Kazakhstan has not taken so far.

– How do the changes in legislation on job-Confectioners manufacturers?

Any legislative initiative in the field of food law could significantly complicate the work of the enterprises, or vice versa - to promote the development of food and processing industry. Although it seems to me, that the main problem is that our laws, that ggosudarstvo itself apply to them formally.

The industry expects the adoption of the draft law "On amendments to some legislative acts of Ukraine concerning the safety of food products". Ключевые моменты этого проекта – учреждение единого органа по контролю над безопасностью пищевых продуктов (now in Ukraine several agencies oversee food safety, but none of them is responsible for the overall situation in the country on this issue), the abolition of a significant amount of unnecessary, but paid documents, strengthening of producer responsibility for the production of unsafe products.

In the same time, some of the initiatives of the State, if adopted, can add significant challenges to manufacturers produce industry. For example, adoption of the Law "On Restriction of production, utilization, luck and distribution in Ukraine, plastic bags and packaging long expansion ". This will undoubtedly lead to higher prices for most types of products in the package.

One of the most pressing legal problems for us (and all the food in general!) – лоббирование принятия Закона «О внутренней торговле». Today, a lot of comments on the law, but few talks about the actual situation, that has developed in our relations between producers and retail chains.

Suppliers have to pay sales network so-called "entry ticket", сумма которого составляет около 100 thousand. UAH. for each new item of goods. In addition, they are forced to "marketing services" payment for, allegedly, product promotion, but, de facto, such services are hardly available. In this case the manufacturer has no effect on network pricing policy regarding those goods, which it supplies to the network.

Terms of settlement of trade networks with producers can reach 90 (!) and more days. Long-term payments, that retail chains are applied to food producers, in fact, There is a form of interest-free commodity loan, which is given sphere of production trade.

You can not, in principle, to talk about competition on equal terms between the large retail chains and medium / small businesses in trade. A large network of crowding out small and medium trading business. She has a so-called "economies of scale", a more effective organization of production and trade processes, high speed, the possibility of hedging risks, etc..

Trade bill should protect manufacturers, small and medium-sized businesses from the aggressive policy of the vehicle and also to regulate the relationship between retail chains and manufacturers in terms of aggression and increase the pressure on the manufacturer. Our association proposes changes to the bill based on the experience of the European regulation of trade, which is a clear policy antisetevuyu. It is necessary to classify the objects of trade in scale and involve different government regulation, depending on the size of the commercial facility: from hard to contain and control major retail, up to a maximum of assistance and wholehearted support from the state small and medium businesses.

Какие проблемы сегодня тормозят развитие именно кондитерской отрасли?

– One of the industry's most pressing problems of today - the fiscal pressure. The current philosophy of government management of the economy in many ways is an alloy of Soviet thinking and greed, coupled with fragmented attempts to introduce the experience of European regulation.

The manifestation of this control, beating in the industry today - a systemic problem with the export VAT refund. This is particularly important for the confectionery industry for export-oriented industries. About a third of the volume of production is exported (it is in terms of value about $1,1 billion.). Confectioners bring about Ukraine $800 million. a positive balance of payments annually.

Not returning the export VAT, State thus "washes out" the working capital of enterprises and increases the cost of confectionery products in the domestic market. This leads to underinvestment in the development of the industry. In particular - to update equipment, manufacturing technologies. It must be remembered, that the confectionery market - a very competitive and rapidly developing in Europe, and in Russia. It is very important to keep up with the times, to quickly implement all innovations, that appear on the market.

We can not say about the constant artificial inflating of the customs value of commodities, which imports the industry.

Also working capital "washed out" of the industry due to the overpayment of income tax: manufacturers pay taxes on profits in the months ahead.

We understand the problem of fiscal imbalance in the country, but they must be addressed not by increasing fiscal pressure on the real sector, and through the creation of net assets, expansion of the tax base, detenizatsii economy, structural reforms in the economy, etc.. At the same time, without overcoming the existing level of corruption, все разговоры о реформах – пустой звук.

– What are the main trends of the market mark? What are the forecasts for 2013 year?

Today, we see the growth of purchasing power. In this situation, the user has to give up part of confectionery products in favor of cost of essential goods. Due to this expansion of the internal market is constrained, competition becomes tougher on him.

For successful implementation of product manufacturers need to constantly carry out a critical analysis of produced product range and constantly improve product quality and safety.

However obvious trend growth dietary segment in the confectionery industry. The priority is to create a low-calorie, and enriched with vitamins, macro and micronutrients products, namely: calorie reduction products, reduction of sugar and fat, enriched with vitamins and minerals, natural antioxidants, preservatives, dyes, creating confectionery special purpose.

In general, my personal forecast for this year disappointing: if governance philosophy, based on the over-regulation of the market in the near future will not change, difficult to talk about the rosy prospects of our industry and business in Ukraine in general.

Elena Bochkovskaya

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