Food producers in difficulty
The Polish Federation of Food Producers (PFPŻ) appeals that many food producers may go bankrupt any moment.
A big problem for companies operating in this sector are high prices of electricity and gas. It is also increases in the prices of raw materials, as well as a reduction in VAT. Even before these rapid cost increases appeared, many companies were struggling with low or even negative profitability. Andrzej Gantner, Vice-President of PFPŻ, says that a large part of entrepreneurs in this industry operates on low margins. In the case of milk and milk products, as well as meat, fruit and vegetables, it is between 2 and 4 per cent. When all the increases are taken into account, the companies will face big losses.
They will not be able to cover their rising costs even with large increases in product prices. As a result, we may soon see a wave of bankruptcies among food producers. Especially small companies, which have a smaller financial cushion or have invested a lot and are repaying large loans, may not survive on the market.
The vice-president of PFPŻ says that currently it is very difficult to stop the growing inflationary spiral. Companies are also not helped by the huge bureaucracy, a big legislative mess and instability of the law. Additionally, entrepreneurs have to deal with new taxes and fees.