Importing food from abroad will reduce the price of food. Why is Agrofert or Madeta dominating the stores?

Everyone is raising prices. Farmers, grocers and traders. They want to make food more expensive because their suppliers are paying them more. Which products do we mainly import and from where? Why don’t we prevent Czech supplier monopolies from getting too expensive by importing more from abroad?

“Commercial chains in the Czech Republic usually import and sell goods from foreign suppliers. At the same time, many of them, for various reasons, try to offer Czech products, which represent a significant part of the offered assortment. Consumer preferences, easy transportation, long-term business relationships, price and so on. However, recently some Czech suppliers have had problems with prices,” economist Pavel Pietarka told the editors, noting that domestic food producers are raising prices and have already announced they will continue to raise prices due to rising prices. .

According to Peterka, outsourcing to other suppliers, even from abroad, causes many costs and other problems. “New negotiations, setting up cooperation, dealing with possible shortages in logistics, quality control and deliveries are a burden for retail chains. This is a relatively long-term process. In addition, when deciding to change supplier, when the price of foreign suppliers is higher than the Czech price, the future “The risk of developments needs to be taken into account. There is also the question of quality,” he says.

The problem, according to Peterka, is that as long as Czech consumers accept rapid price increases in retail chains and continue to buy goods, traders can maintain a comfortable level of their margins and not have to worry about an exodus of customers. “Then there’s not much motivation for significant changes in supply chains,” he adds.

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According to Information According to the Agricultural Foreign Trade of the Ministry of Agriculture, in the period from the beginning of the year to this September, mainly pork, bakery products, products for animal nutrition, food products and cheeses and yogurt were imported into the Czech Republic. It was mainly imported from Germany and Poland (19.5 percent and 15.8 percent). Other important importers are the Netherlands (7.2 percent), Slovakia and Italy (both 6.4 percent) and Spain (6.2 percent). Among the third countries, China, Ukraine, Norway, United Kingdom, Turkey and Brazil are the main suppliers.

From January to September, more than 16 billion crowns worth of pork was imported, an increase of almost 25 percent compared to the same period last year. We imported chicken meat at less than six billion, and imports increased by almost 8 and a half percent. We imported bread for 11 and a half billion crowns, which is 22 percent more than last year. Imports of cheese and curds were valued at 9 and a half billion, an increase of not even one percent over last year.

Madeta is the market leader in terms of production of milk products. Its director, Milan Teplý, recently said that he will have to increase the price of goods from January because, he says, he will not receive the promised subsidies from the state and his energy costs will increase. The dairy and meat processing industry is largely controlled by Agrofert from the trust fund of former Prime Minister Andrej Babis.

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“Agrofert occupies an important place in many food industries. It is at least in the bakery, dairy and meat processing industries. It is a fact that the price policy of small companies is also often governed by market leaders. When, suppose Agrofert becomes expensive as a model, others can too, Because in practice Agrofert will break the price barrier, and others can benefit from it,” agricultural analyst Peter Havel recently told Czech TV.

Since 2007, Agrofert fully controls Kostelecké Uzeniny, and also includes other meat processing companies such as Kmotr – Masna Kroměříž, Krahulík – Masozávod Krahulčí, Masokombinát Klatovy and Vodžanská. In terms of dairy products, Agrofert owns one of the largest Czech dairy farms, Olma. Mlékárna with the Tatra brand belongs to Hlinsko Holding.

Most important is the push for healthy competition among suppliers and traders. “The Czech market is relatively small and significantly broken by several chains. Each small town has many small or large stores. Therefore, the competitive battle with newly arrived stores will be very difficult and long, which will have a negative impact on the profitability of such a business. These reasons and probably many more are the reasons why foreigners enter the Czech market. reduce the interest of retail chains,” believes Peterka.

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