Increase in Cheese Production in Ukraine: New Market Trends

In Ukraine, there is a growth in cheese production, made possible by active sales stimulation. Market operators are utilizing a wide implementation of promotional offers that include significant discounts, which can reach up to 25%. At the same time, the base prices for products remain unchanged, allowing producers to maintain a “buffer” in case of potential raw material price increases in the fall.

This is reported by AgroReview

In the event of rising raw material prices, cheesemakers may reduce sales volumes through promotional offers without raising product quality. Meanwhile, retail chains are reluctant to compromise their margins, applying up to a 25% markup on such products, which is quite high compared to European Union countries, where markups are significantly lower.

For example, in Hungary, a markup limit of up to 10% has been introduced for supermarkets on 30 types of food products, including 10 types of dairy products, which includes cheese. This helps to reduce price pressure on consumers.

Significant promotional discounts on domestic cheeses, along with the strengthening of the euro, have positively impacted the reduction of imports of this product. This, in turn, has allowed Ukrainian producers to gradually increase cheese output. Although production figures in the first quarter remain modest compared to the previous year, the trend towards growth is already noticeable.