Fasting month Lebaran momentum is a blessing for the food and beverage industry. The reason is that during the fasting month and Lebaran, the sales turnover of food and beverage industry can increase up to 30% compared to regular months. How ever, the rising prices of subsidized fuel (BBM) make the industry’s profit margin decreases. Chairman of the Indonesian Food and Beverage Association (Gapmmi), Adhi Lukman, in Jakarta (Monday, August 26), said that during the fasting month and Lebaran, demand for food beverage products has historically increased by approximately 30%compared to normal months. Turnover during the fasting month and Lebaran this year could reach Rp100 trilion-Rp150 trillion.
However, the fuel price hike makes cost of production increases. On the other hand, producers could not immediately raise prices of their products. The reason is that food and beverage producers have contracted modern retailers for three to five months ahead so it is difficult for them to raise prices. Not only that, earlier this year, growth in the food and beverage industry turnover is not as fast as expected. Thus, the food and beverage industry tries to maintain selling prices in order to maintain the turnover.
Adhi said that in the first quarter of 2013, sales turnover of the food and beverage industry is around Rp152 trillion. Until the end of this year, he estimated that the turnover will grow around 8%-9% over the past year to around Rp756-Rp763 trillion. AS an illustration, in 2012, sales turnover of food and beverage industry in Indonesia reached Rp700 trillion.
On the other hand, Adhi said that home industry, and catering industry will make efficient use of raw materials in line with the rising prices of 12 kg LPG in May 2013. The 12-kg LPG price increase would be very burdensome to home industry, restaurant, and catering industry. Because, since the beginning of the year, food and beverage industry has begun to raise prices by 5%-10% due to increase in provincial minimum wage (UMP), electricity tariff, as well as prices of industrial gas.
If 12-kg LPG prices go up, the selling price is predicted to be more than 10% but by considering that the purchasing power is still low, the selling prices may not rise too high. At lleast, the restaurant and catering industry is making efficient use of raw materials of foodstuffs, is volume is reduced. According to him, what can be done by the industry is simply adjusting the volume of goods sold. Because, at the beginning of the year, there is not a few industry that has raised selling prices ranging from 5% due to the increase in electricity tariff and UMP.
Meanwhile, according to the Marketing and Commercial Director of Pertamina, Hanung Budya, the government will implement a new distribution system by raising the cost of delivery of LPG to consumers who are considered financially capable. Almost every year, Pertamina suffered losses due to the sale of 12-kg LPG. According to him, it does not need to happen if 12-kg LPG users are those who are financially able.
So, restaurant and cafe businesses should be subsidized. And, for consumers who are less financially able, the government has prepared a 3-kg LPG subsidy. He said that he has applied for permission to the government for a price adjustment. This is also the findings of the Supreme Audit Agency (BPK) that Pertamina has lost several trillions for something that does not need to be subsidized.
Business News - August 28, 2013