Prices have always differed in richer or poorer regions, subsidized regions or in the capital of Ukraine. And from post-Soviet times to the current wartime, there will be a consumer who will go and order delicacies in the capital or regional centers. Also, there are those who prefer eco-products of rural production without, so to speak, impurities. However, if the majority of agricultural products and fishery products are provided for freezing, canning, and long-distance transportation, there are products that are not suitable for this. These include some types of fish, dairy products, and bread takes first place.
We use local bread products, as they spoil quickly. Therefore, there is a gap in its prices between regions. Thus, according to the Ministry of Finance, the average price of wheat bread made from high-grade flour in Ukraine was UAH 44.44 per kilogram. In the regions, the picture is different – in Ternopil Oblast, the price is only UAH 32.43, in Lviv Oblast, UAH 44.13, in Dnipropetrovsk Oblast, UAH 43.15, and, as expected, the record for the capital is UAH 64, while in Kyiv Oblast region – UAH 46.27.
Average prices for wheat bread from high-grade flour by region in February 2024 (UAH/kg)
Photo/minfin.com.ua
Both in the east and in the west of the country, we see both higher and lower than average prices. That is, geography does not affect prices. What then? Where does the price of bread come from? The main component is flour – 35-40%, 10-15% is water and energy costs, 25-30% are sales costs, 5-7% goes to employee salaries, up to 10% – administrative costs, and, of course, taxes – 8%. These indicators are approximately the same throughout the country. So what is the reason for the price difference of double and sometimes more?
Photo collage/AI “FACT”
Experts believe that the secret lies in the same expenses for sales and administration. Simply put, it’s logistics. In one region, grain processing facilities are conveniently located for grain traders and bread factories, in others there is a problem with this. More often it is worse: either the grain or the flour has to be transported to another region altogether, as the processing capacity does not match the needs. In addition, different factories have different energy costs per unit of production. However, this is not the main problem. Previously, there were so-called social varieties of bread and their prices were set by the state. Bakeries and retailers had to put up with it. However, the modern economy dictates its own rules. However, no one canceled contracts, obligations, network interests and ultimately corruption.
What is it about? In most chain supermarkets, the prices for the range of food products do not depend on the region of their sale. With this, they attract “their” buyer, for whom the marketing service and calculated advertising work. At the same time, this does not apply to bread, where agreements are concluded directly between the supplier and the market. The same administrative-regional mechanism is needed here. A simple example: the square meter rent of commercial space in Kyiv, Lviv or Dnipro, and even more so in towns and villages, differ significantly, sometimes by a factor of ten. At the same time, “his majesty” of trade – Purchasing power – dictates its rules. Residents of the capital and powerful regional centers have always had greater financial opportunities. However, prices were always rising for all goods and services, and bread was no exception.
The dynamics of average prices for wheat bread made from high-grade flour is illustrated by the graph below
Photo/minfin.com.ua
The economies of all countries are forced to reckon with inflation, financial risks and economic crises. By increasing prices, our economy ran even faster, catching up with European prices. In particular, our country has caught up with Poland and some other EU countries in terms of prices for some types of bread, but the solvency is not keeping up with this. Well, reforms that gave more economic freedom to communities improved the situation somewhat. First of all, for members of “wealthy” communities. It is local cells that can influence retail pricing. There are many mechanisms for this. And what should residents of “poor” communities do? In addition, the Kyiv region is not the poorest financially, but the capital and Pogotov. However, bread prices are record high here.
A terrible war came, which brought countless losses, the economy is on the brink, but it is still holding on. Everyone suffers, and the most vulnerable are the least socially protected sections of the population, for whom it is not always possible to buy bread. Millions of temporary migrants were added to pensioners and disabled people. Yes, the state took care of them – providing at least some financial assistance, the same for everyone. Its size does not make it possible to even pay for temporary housing for a family in a foreign region, to send children to kindergarten and school.
Whatever factors affect pricing, there must be a way out. It is necessary to restore a well-thought-out national social regulatory policy, at least for basic goods and services, at least for the poorest.
