With the first day of March, international suppliers will raise prices, while domestic increases are mostly postponed until April – this was confirmed to us by several suppliers and traders with whom we spoke to find out what will increase in price, when, and by how much.
The explanation for this decision regarding price increases is relatively simple – traders do not have much negotiating power when it comes to foreign multinational suppliers, and domestic producers have mostly decided to wait until April to see if the government will again influence electricity prices with its measures.
Domestic producers, one consultant told us, sent new price lists as early as the beginning of November, but due to pressures from the government and the change of currency to the euro, they abandoned the price increases. The last price changes in stores were mostly in mid-December.
– There will be price increases this year, but there won’t be big jumps like last year. Although new price lists, mostly from foreign suppliers, come into effect from March 1, we all have some stock, so changes won’t happen overnight. In any case, although costs are rising, and thus products, price increases will not be as significant as last year. Most domestic producers hope that the government will again influence energy prices. If that does not happen, new price increases are inevitable – said Martin Evačić, president of HUP-Association of Trade and the retail chain NTL.
Since there is not much negotiation with ‘multinationals’, which boils down to whether you will accept the price list or not have the product on the shelf, their products will mostly change prices upwards in the coming days.
The director of one retail chain explained that these increases mostly relate to non-food products, so the impact of the March price increase should not have a significant effect on the consumer basket. However, he fears that there could soon be a shortage of grains due to reduced and slowed supply from Russia and Ukraine, and consequently their price increase, which then spills over to a whole range of other products.
Price increases are delayed in our country
It is a public secret that the government has pressured traders, and they in turn domestic producers, which is why the wave of price increases has been temporarily halted. However, such an approach is unsustainable in the long term.
– The rise in prices in Western countries started somewhat earlier than in our country, so price increases here are a bit delayed. Given that energy prices, plastics, raw materials, and stock prices have risen, it is unrealistic for producers to sustain this in the long term – said one consultant whose specialty is the trade and food industry sector.
For now, domestic producers, with the exception of those who are heavily dependent on fluctuations in commodity prices, mostly do not change prices, even at the expense of their own profits. Ivica Pivac, co-owner of the Vrgorac meat industry, confirmed to us that the prices of his meat products will not change.
– We all analyze business and costs and try to find additional reserves to avoid significant price increases. In some segments, where the prices of input raw materials have risen by 100 percent, of course, that is not exactly simple – said Pivac.
One producer, who wishes to remain anonymous, said that at the beginning of the year he managed to negotiate a price increase for his products thanks to a firm stance towards retail chains, but that this increase is still less than the rise in energy costs.
– It is an absurd situation that we import expensive electricity while at the same time we wait for months for paperwork to resolve so that we can produce electricity ourselves. The cost of electricity and gas alone has increased fourfold – said the producer.
All interlocutors, whether traders or suppliers, emphasize that they are trying to pass on as little price increase to consumers as possible. But this is not simple when input prices are constantly rising.
– We can confirm that we have received announcements from suppliers about possible new price lists, but, as always, the formation of retail prices is preceded by joint discussions, and we will continue to work on ensuring the best prices for our customers in cooperation with suppliers. We also want to emphasize that we apply only the increase in procurement prices to retail prices, even at the expense of our own margins, in order to minimize the impact on customers – responded from Konzum.
Inflation was double-digit last year despite all these efforts, and for this year, forecasts are around six percent. Thus, price increases will still be greater than those we have been accustomed to in previous years, but still lower than those in 2022. Of course, with the caveat that there will not be any new external shocks in 2023.
