Predsednica DAES Tatjana Brankov za RTS- Sezonsko voće i povrće, možemo li da očekujemo niže cene?

SAAE President Tatjana Brankov for RTS - Seasonal fruits and vegetables, can we expect lower prices?

Seasonal fruits and vegetables have arrived - can we expect lower food prices? With the arrival of local vegetables and fruits on the market, food prices should fall. Retail prices do not only have a big impact on inflation, but also on the standards of citizens who spend the most money on food. Tatjana Brankov, president of the Serbian Association of Agricultural Economists, analyzes for RTS how the price is built up from the field to the table and whether we can expect price reductions soon.

The Serbian Association of Agricultural Economists and the Institute for Agricultural Development of Countries in Transition from Halle in Germany have completed research on the movement of food prices in Serbia over the past three years.

The results showed that the retail price of potatoes rose by an average of 90 percent, as did carrots. The price of apples and roast beef jumped by more than 50 percent, and dry bacon rose slightly less.

The absolute record holders of price increases were pork fat with a price increase of over 160 percent. Researchers see the biggest culprit for unrealistic food price increases in trade margins, which they say are far higher than European ones.

Food Ombudsman

Among other things, they see a long-term solution in the introduction of the institution of a food ombudsman, who would work on a fair relationship between producers, processors and food traders. But also in investing in the domestic food industry, in the activation of commodity reserves as well as in the introduction of high transparency in terms of prices.

Only one domestic retail chain has a margin close to that of the EU, the others are not fair.

When asked if we can expect lower food prices since the season of local fruits and vegetables is coming, Professor Tatjana Brankov says that she is not overly optimistic.

Marija Miladinović Lisov's interview with Tatjana Brankov for RTS

The distribution of profits is not fair

The president of the Serbian Association of Agricultural Economists adds that in the season of ripening of domestic fruits we can expect a drop in prices, but that this is short-term. She does not believe that this trend will have special effects on the processing sector.

She says that the distribution of profits between farmers, processors and traders is not fair and that lowering food prices in Serbia can be achieved by lowering trade margins.

"The margins that I will present now are even higher, because we do not know how much the unfair practices of traders are additionally incorporated into the costs of producers." If we look at the gross margin, it ranges from 21 to 31 percent for major supermarkets in Serbia, while the mark-up (the margin that shows how much the product is 'upgraded' above its original cost) is as much as 44 percent," says Professor Brankov and underlines that only the domestic supermarket chain has a one percent lower margin than the average of the European Union, which it says is 22.5 percent.

Even the discounters that appeared in Serbia, which were expected to influence the lowering of prices, are not efficient enough. And they have a higher margin than the domestic chain. The same chain that operates both in the countries of the European Union and in Serbia, has a margin of, say, nine percent more here than in the EU. So, it is generally not fair, Brankov concludes.

Consumer associations should be independent

When asked whether consumers and their associations can do something about unrealistically high prices, he answers that they should be independent and efficient.

"The Commission for the Protection of Competition also needs to do its job efficiently, and we need to be informed." So, it is not logical to me that there are such big differences in margins. If that difference in margins was one to two percent, I could understand that. And this is also present in the meat industry. "One company has a margin of 35 percent, another company has a margin of 20 percent," says the professor of agricultural economics. She adds that the rise in prices has led to less consumption.

Professor Tatjana Brankov said that the consumption of white cheese was found to be the most sensitive. So, if the price of white cheese increases by 10 percent, its consumption decreases by 15 percent.

"If the price of dry bacon increases by 10 percent, its consumption decreases by eight percent," said Professor Brankov and underlined that traders will behave as they are allowed to.

Source: RTS