Food packs slim down, prices swell
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Loading... - Aagni Begum
- 22 Mar 2022
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Food processors in Bangladesh have either cut the size of packs or increased prices to absorb the surging cost of raw materials, handing a blow to end customers already struggling amid higher inflation.
As a result, consumers are either getting less for the products whose prices have not been revised upwards or paying more for the products that have seen no change in weight.
Prices of the ingredients used in making bakery products, cakes, sweets, chips, Bombay mix and ice creams have gone up owing to demand recovery and supply chain disruptions globally, forcing both brands and non-brands in Bangladesh to opt for reducing pack sizes or revising prices.
The prices of flour, sugar, edible oil and milk have risen by 30-60 per cent in the last six months, industry people say.
This has prompted bakeries to cut the weight of items such as cakes, biscuits and bread by as low as 5 per cent to as high as 60 per cent.
Pran-RFL Group has gone for weight reduction instead of raising prices and its products with a reduced size hit the markets three months ago, according to Kamruzzaman Kamal, marketing director of the largest food manufacturer in Bangladesh.
For example, the weight of its Honeycomb bread has been reduced to 65 grammes from 75g, bun from 50g to 45g, dry cake from 35g to 30g, slice cake from 40g to 35g, and Fruit Fun biscuits from 30g to 24g.
"If we increase the price by keeping the weight unchanged, it will be difficult for consumers to buy the products under the current situation," Kamal said.
Danish Foods Ltd, owned by Partex Star Group, enforced weight reduction seven months ago.
The size of the 350g toast biscuit pack has been brought down to 250g. Similarly, the family pack biscuits previously weighing 210g to 240g are now available in 165g to 180g packs for the same price.
"We have reduced the size of the packs for both local and export markets," said Debasish Singha, head of export of Danish Foods Ltd, adding that the price of packaging materials has surged by 20 to 30 per cent recently.
Well Group, which runs a food chain selling sweets, cakes, bread, buns, cookies, biscuits and snacks, reduced the size of the products by 10 to 25 grammes this month.
"There are no alternatives. We are now facing a major challenge because of the rise in the price of raw materials," said Syed Nurul Islam, chairman and CEO of Well Group.
"Customers will not be able to afford if the price increases under the current circumstances."
Some companies have raised prices to cope with the rising cost of production.
Igloo, a popular ice cream brand, increased the price of its products on March 1. On average, prices have gone up by 10 to 25 per cent, said Shamim Ahmed, chief operating officer of the company.
For example, Igloo Vanilla Cup Ice Cream was priced at Tk 20 before the latest price adjustment. It is now selling at Tk 25.
Bombay Sweets and Co Ltd, the owner of popular chip brands Potato Crackers, Mr. Twist, Alooz and Bombay mix brand Bombay Sweets, has resized the chips packs and increased the price of Bombay mix.
One and a half years ago, the weight of a pack of Potato Crackers was 25g. The pack size was first reduced to 22g and then again to 18g.
Likewise, a Mr. Twist chip pack weighed 25g and customers are now getting 5 grammes less products, albeit at the same price.
A packet of Bombay Sweets Chanachur used to contain 20 grammes of food items. The pack now weighs 15 grammes. The price has remained unchanged at Tk 5.
The 600g pack has been shrunk to 500gm and the price has increased from Tk 100 to Tk 110.
The price of the 150g Bombay Sweets Dalmoth Chanachur pack has been revised upwards to Tk 45 from Tk 40. It went up to Tk 80 from Tk 60 for the 300g pack.
"Still, we are finding it difficult to cope with the rising costs. We are running the business at break-even," said Khurshid Ahmad Farhad, general manager of Bombay Sweets.
Premium Sweets plans to raise the price by 10 to 20 per cent on average from this month.
"If we don't adjust the price, we will not be able to offer quality products. And if we can't ensure the quality, our reputation will be dented," said Mahbubur Rahman Bakul, head of corporate affairs of Premium Sweets.
"Under the current circumstances, there is no other option but to increase the price."
On average, the price of every bakery item at Yousuf Bakery & Confectionery has gone up by Tk 5 to Tk 10, said Ishrat Jahan, one of the partners of the Johnson Road outlet of the bakery.
An executive of a multinational company, which sells dairy products, beverages, noodles and cereals, among other items, says they are observing the situation and have not decided yet whether it would go for resizing the packs or increasing the price.
Desh Bondhu Bread & Biscuit Factory in Mirpur-7 makes items largely targeting the low-income groups.
"So, we can't raise the prices if we want to," said Md Ashraful Alam, proprietor of the company.
Earlier a 500g packet of dry cake was sold for Tk 90. Now, he has brought it down to 400g but the price has remained unchanged.
Similarly, the 500g toast pack has been resized to a 450g pack. On average, the pack sizes of all products has been slashed by 50 to 100 grammes, Alam said.
According to the businessman, in 2020, the price of a container of palm oil weighing 182kgs to 184kgs was Tk 12,000. Now, it is more than Tk 30,000.
He used to buy a 16kg carton of Dalda, a vegetable oil, at Tk 1,500-1600, which now costs Tk 3,000. The price of sugar has surged to Tk 3,700-3,800 per 50kg bag from Tk 2,200-2,500 previously.
Besides, his monthly gas bill rose from Tk 70,000 to Tk 1.2 lakh. He has to pay Tk 9,000 in monthly wage to a worker now against Tk 6,000 before the pandemic.
"The price of all of the raw materials has gone up. So, companies either have to resize the packs or adjust the prices to stay afloat," said Shafiqur Rahman Bhuiyan, president of the Bangladesh Auto Biscuit and Bread Manufacturers Association.
Ghulam Rahman, president of the Consumers Association of Bangladesh, says businesspeople have to behave responsibly considering the interests of consumers.
"Otherwise, the interests of consumers will not be protected. If anyone cheats consumers, they should be brought under the law." Read More...
