October 2 2003, 15:31 APK-Inform

Bread bakers claim radcial measures from government

Ukrainian bread bakers are claiming that government take radical decisions concerning price formation in the industry, the Vice Presidents of All-Ukrainian Association of Bakers Volodymyr Slabovsky and Yevhen Lenh and General Director of the Association "Ukrkhliboprom" Olexandr Vasylchenko have said at a press-conference in the news agency UNIAN.

They said there were all the grounds now to say that the crisis on Ukraine's flour and bread markets had not been overcome.

According to Ukrkhliboprom's data, because of the administrative pressure upon bakeries about 30 percent of these enterprises are now working with zero or negative profitability.

The bakers see two options of approaching the problem. The first is to enable the plants to work in market environment, without administrative regulation. This will result in 20 to 25 percent price increase. The second option assumes keeping on regulation of prices and profitability of bakeries, but it is to be offset by subsidising of the plants.

The speakers to press-conference noted that social constituent of the issue had to be tackled by the state, but not shifted onto the shoulders of producers.

Bakeries within Ukrkhliboprom are now producing 70 percent of bread in Ukraine. The Association includes 384 plants with daily production capacities ranging from 15,000 to 200,000 tonnes of bread and bakery products.