Estonia's leading meat processor HKScan Estonia, which operates the Rakvere and Tallegg trademarks, announced on Thursday that prices of meat products would increase at the start of next year.
"The effects of the multiplication of energy prices and the price increases of animal feed and packaging stemming from shipping difficulties has affected prices of finished products by 10 percent on average, which will likely reach customers in the start of the new year," the company announced.
HKScan Estonia board member and Baltics business manager Kristina Mustonen-Shevelevsky said production costs have increased continuously over the last few years and all estimates show that input prices will not decrease anytime soon.
"The increase of electricity and gas prices affects costs through the increase of production costs and the raw material costs of our suppliers. Electricity has gone up 2.5 times, gas has gone up four-fold. All actions to save energy, which are reasonable, we have already implemented, but the savings from those do not cover for our increased energy bills," Mustonen-Shevelevsky said.
In addition to energy prices, HKScan's costs as Estonia's largest pig farmer and only domestic poultry producer are most affected by prices of animal and bird feed.
"The prices of different feed components have gone up at least 30-40 percent a year, but feed price makes up 70 percent of the costs for poultry farming and 60 percent of the costs of pig farming," the board member added.
The packaging required to maintain product quality and shipping has also increased 40 percent, as have transport costs in relation to gas price inflation. "The situation that has developed over the last few years has put food production based on domestic animal husbandry in a complicated situation, which has unfortunately made it unable for us to prevent price increases from reaching consumers," Mustonen-Shevelevsky said.
Editor: Kristjan Kallaste