Demand curve shifts towards cheaper products
— 2009-04-03 —

President of Produkty Pitania Stefano Vlahovic answered the publication’s questions.
As compared to the 1998 crisis, today the whole country is affected as well as the rest of the world. So far the food industry has not suffered as much as many other sectors. The only problem is lack of credit finances.
State support is necessary in terms of access to credit resources. Otherwise it would be impossible to deliver goods at a profit due to lack of money.
The state’s hand is heavy. It’s best for the state to leave businesses alone.
It would be difficult to imagine that a major player in the industry would have accumulated sufficient money to initiate mergers and acquisitions.
Russian market is so vast that a monopoly in the sector is highly unlikely taking into account the absence of behemoth players.
Russians are able to produce goods of the same quality as in the west. Sometimes crisis may drive the quality of locally made goods up.
Savings and production cost strategies should not affect product quality in the sector.
The demand curve trends towards cheaper products leaving top segments completely unprofitable.
People will always keep eating and this is another major driver for the industry.
Kaliningrad as a special economic zone has its benefits and negative aspects as well.
Russian investors may invest in Kaliningrad via the Cyprus as well as businessmen from across the globe. The problem is the strong influence of the federal center. Whenever an industry grows strong in Kaliningrad with major investors already in place, certain sub-law regulations are issued to limit the scope of the company’s capabilities.