No price freeze for ice cream

  • 2004-02-19
  • By Aleksei Gunter
TALLINN - Estonia's two largest ice-cream producers, which together control about 90 percent of the market, will raise prices in connection with sugar and cream price increase after EU accession.

Both Tallinna Kulmhoone and Balbiino, which hold 48 percent and 40 percent market shares, respectively, will have to adjust their sweet production prices.
Teet Anier, marketing manager of Balbiino ice-cream producer, said the increase in sugar prices would raise the manufacturing costs associated with ice cream and other products and would bring an increase in retail prices as well.
"Balbiino will make its decisions on how much the price could go up depending upon the market situation. At the same time we hope to increase our export which would allow us to keep lower manufacturing costs," said Anier.
Anier added that Estonia's EU accession would have a positive effect on his company.
"In addition to the Latvian and Lithuanian markets, we have also entered the German market and hope to find a place in the Swedish and Finnish markets," he said.
Balbiino shipped the first load of its ice cream to the German market three weeks ago, and that marks only the beginning of the company's expansion to the West.
Anier said that despite the sugar price increase Balbiino would be capable of holding lower prices compared with the companies present at the EU market today.
"In connection with the accession we do not plan any changes in the production process and the recipes," Anier added.
Meanwhile, last July was a record month for Tallinna Kulmhoone in terms of both sales and production volume. The company produced and sold 1.1 million liters of ice cream, almost as much as the company used to sell in the 1970s and 1980s when it ruled the Estonian ice-cream market alone. As usual, hot weather was the best salesman for ice-cream producers.
But according to economic forecasts, sugar and high-fat cream prices will go up the most, and that will bring a price hike for ice cream, said Piret Sauter from Tallinna Kulmhoone.
Other changes are on the way with the impending accession to the EU, including new packaging facts.
"We will have to review the information printed on the ice-cream wrappers and add more information such as more details about the additives the product contains," she added.
Tallinna Kulmhoone sells its ice cream in Estonia, Latvia and Lithuania.