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Raspberry prices. The Office of Competition and Consumer Protection presents the results of the price-fixing inspection

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The Office of Competition and Consumer Protection presented the first results of inspections in nearly 60 purchases and at the 5 largest raspberry processors. UOKiK checked how the prices of these fruits are formed and what influences their amount. “The collected material shows that there are no grounds for claims that the difficult situation on the raspberry market may be the result of price fixing by purchasers or processors” – it was stated.

For over a week, UOKiK and the Trade Inspection have been conducting inspections on the soft fruit market. To date, the controllers have visited 58 purchases located in the Lubelskie and Mazowieckie voivodeships, regions belonging to the leaders of raspberry production in Poland. Inspections were also carried out at the 5 largest processors – Döhler, Rauch, Real, SVZ i Austria juice. The entire raspberry distribution chain is analyzed, with an emphasis on raspberries used in processing.

As stated the office of Competition and Consumer Protection preliminary results of the study confirm that the distribution chain of raspberries is short, which is related to the unstable structure of these fruits.

“In the case of raspberries intended for processing, there is usually only one intermediary between the processing plant and the producer – the purchasing point. He is responsible for packaging and ensuring transport to processing plants. In the case of dessert raspberries, wholesale markets play a key role, e.g. in Lublin or Warsaw in Bronisze, thanks to which producers or intermediaries deliver fruit to stores or directly to consumers” – we read in the release.

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What affects the prices of raspberries

The Office of Competition and Consumer Protection indicates that the main factor influencing the purchase price of raspberries for processing in purchasing centers is the price offered by processing plants. It is the starting point for determining the purchase prices of raspberries from farmers through collection points. Collection points from the price offered by processing plants subtract operating costs (employee salaries, costs of materials and energy consumption, costs of transport and storage) and the owner’s profit, thus determining the purchase price from farmers. This is confirmed by the figures obtained during the inspection.

A comparison of the average prices of raspberries purchased by the surveyed points (raspberry buying centers) cooperating with the controlled processing plants with the average prices of raspberries purchased by them on the same day showed that the buying-in prices changed following the changes in the prices offered by the processing plants. The average purchase margin of industrial raspberries (operating costs and assumed entrepreneurial profit) from 1 to 10 July amounted to PLN 0.44-59 per kilogram, i.e. a maximum of 12 percent.

At the same time, the purchase price of raspberries from farmers is affected by the quality of the raw material – class I or II. The purpose of soft fruit is also important. The prices of raspberries purchased by processing plants for the production of juices or mousses were about PLN 0.20-50 per kilogram lower than those of raspberries intended for freezing. At the same time, the results of the inspection indicate a price differentiation between the examined collection points by as much as 0.50 PLN per kilogram in the case of raspberries of the same quality category.

From 1 to 21 July, the average purchase prices of raspberries in purchases for processing ranged from PLN 3.95 to PLN 5.29 per kg, and raspberries for freezing PLN 4.30 to PLN 5.70 per kg, depending on the day of purchase.

There is no evidence of price fixing

The data obtained by UOKiK in the course of inspections of large fruit processors also do not confirm the coordination of activities between them in terms of prices or organization of raspberry purchases.

“From July 1 to July 10, the purchase prices of fresh fruit by the plants were very volatile, with most of the inspected ones negotiating prices directly with raspberry suppliers and did not set the price list for a given day. The inspectors obtained a list of all deliveries with the price, and on this basis they determined that the prices ranged from PLN 4.80 to PLN 6.30.

– The results of the analyzes carried out so far do not give grounds to claim that the difficult situation of raspberry producers in the current season is the result of collusion or the use of contractual advantage by purchasers. The price differential between them that we observed argues against the price-fixing hypothesis. We can see that processing plants are of key importance in the process of price formation, which – based on the material collected in the proceedings – set prices independently of each other. Entities belonging to international capital groups have processing plants in many countries, as a result of which they can decide each time on which market raspberry processing provides them with the lowest cost of product production. At the same time, raspberry is not their main business area, so sometimes they do not have to buy raw material on a given market at all when they can satisfy their customers’ demand by purchasing and processing it at a lower cost in another country, explains Tomasz Chróstny, President of UOKiK.

Manufacturers are looking for the cheapest raw material

According to the knowledge obtained by UOKiK, processors belonging to large European capital groups set the purchase prices of raspberries in relation to the price set by the entities to which they deliver processed products (mainly concentrated juices and frozen foods). Purchase and processing of raspberries is not a dominant activity for these processors. They are mainly involved in the production of apple concentrate, as well as other fruit preserves.

The Office indicates that “the entrepreneur’s decision to purchase raspberries depends on the current demand for the target products, the stocks of this and other fruits (e.g. strawberries, chokeberries, currants, which are stored and processed using the same infrastructure), as well as the prices of raw materials and preserves. Large international groups may decide in which country to purchase raspberries and process them, making this decision dependent on the lowest costs of fruit, human labor and other possible to obtain on the market”.

In extreme cases, they may not start buying raspberries in Poland in a given season, and start the production of juices and frozen foods in another countryin which they will obtain better conditions for processing, including a lower unit production cost. This observation was confirmed during the inspection carried out by the Office of Competition and Consumer Protection at one of the large international processors, which in the past years bought raspberries, and this year did not start purchasing these fruits in Poland at all.

A simplified diagram of the raspberry distribution chainUOKiK

The inspected processors declared that they currently buy almost exclusively fresh raspberries from Polish suppliers. In individual cases, it was declared that a small part of the fruit came from Ukraine or Serbia (up to 10 percent of deliveries). However, it should be noted that frozen raspberries were purchased by some establishments before the fruiting season in the country.

Main photo source: Shutterstock

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