Beijing, October 14 (Reporter Xie Yiguan) Following Angel Yeast, condiment giant Haitian Flavor Industry also announced a price increase.
Some products such as Haitian soy sauce and oyster sauce will be adjusted
On the evening of the 12th, Haitian Flavor Industry issued an announcement that the factory price of some products such as soy sauce, oyster sauce and sauce was adjusted, and the adjustment range of the main products ranged from 3% to 7%, and the new price implementation began to be implemented on October 25, 2021.
Some Haitian products in the supermarket. Photo by Xie Yiguan, a reporter from China News Network
This is also the second time that Haitian Flavor Industry has announced price adjustments in the past five years since the price increase in December 2016.
On the afternoon of the 13th, in a supermarket in the Xicheng District of Beijing, the staff told reporters that the soy sauce products in the supermarket have not yet received the price increase notice.
As early as September 24, Haitian Flavor Industry has been rumored to have raised prices. On the same day, some media quoted informed sources as reporting that Haitian Flavor has verbally conveyed the price increase information, the price increase range is 5%, including soy sauce, sauce, oyster sauce, the products involved in the price increase or will account for more than 90% of the company's overall revenue.
However, Haitian Flavor Industry issued a clarification announcement on the evening of September 26: since 2021, the costs of major raw materials, transportation, energy and other costs have continued to rise sharply, which has brought certain challenges to the company's operation, and the company is recently evaluating whether to adjust the price of products, but the price adjustment plan has not yet been finalized.
Judging from the market reaction, the rumors of price increases have significantly increased the stock price of Haitian Flavor Industry. Since September 23, Haitian Flavor Industry has risen for 7 consecutive trading days, and even appeared on the 24th. As of the close of trading on October 13, Haitian Flavor's stock price has risen by 30% in 10 trading days.
It is worth mentioning that in December 2020, Haitian Flavor Industry issued the "Winter Warm Notice", which mentioned that the production cost of soy sauce condiments has generally risen, especially for bulk agricultural and sideline products such as soybeans, and the price has continued to rise all the way to a new high. As a leading condiment company in China, Haitian always puts social responsibility first. "There is no price increase plan for Haitian products in 2021!"
Why does Haitian Flavor Industry rebel?
For the reasons for the price increase, Haitian Flavor Industry said in the announcement, "In view of the continuous rise in the costs of major raw materials, transportation, energy and so on." ”
"From the perspective of the soy sauce industry, the prices of soybeans and soybean meal, which account for the largest proportion of costs in production, rose by 35.78% and 26.18% respectively compared with December 2019. At the same time, the main packaging material corrugated paper also rose by 21.37%. Guolian Securities analyst Chen Mengyao pointed out.
Data chart: Customs officers conduct sensory quarantine of chinese soybeans on the "Princess Athena" ship moored in the quarantine anchorage of Yantai Port. Photo by Qu Yanlin
"Haitian Flavor industry has internally digested cost pressures, but the price of raw materials has still risen sharply, and the capital market is not satisfied with its profits." Zhu Danpeng, an analyst in the food industry, said that under the combination of internal demand and external factors, price increases have become inevitable.
According to the financial report, in the first half of 2021, Haitian Flavor Industry's revenue was 12.332 billion yuan, an increase of 6.36% year-on-year; the net profit attributable to the company's shareholders was 3.353 billion yuan, an increase of 3.07% year-on-year.
Not only has the performance growth rate declined compared with before, focusing on the second quarter, Haitian Flavor Industry's revenue and net profit attributable to shareholders of listed companies fell by 9.39% and 14.68% respectively, and for the first time since the listing, there was negative growth in single-quarter performance.
For the performance of the first half of the year, Haitian Flavor Industry explained that the changes in the external economic environment have brought about a weakening of consumer demand, and the fission of new consumption and new channels has brought new challenges and opportunities to the condiment market, so that consumer demand has shown a trend of diversified development; since this year, the price of upstream materials has continued to rise, the production costs of enterprises have faced greater operating pressure, and the profits of the industry have been squeezed.
Condiments ushered in a wave of rising prices?
Chen Qingqing, an analyst at Guosen Securities, believes that with the landing of price increases, it is expected that the pressure on the cost side of Haitian Flavor Industry is expected to ease. At the same time, according to channel feedback, the increase in the distributor's shipment price and terminal price will be higher than the increase in the factory price, so as to boost the confidence of dealers and restore channel profits.
The picture shows the condiment area inside the supermarket. Photo by Xie Yiguan, a reporter from China News Network
Leading enterprises took the lead in raising prices, and in Zhu Danpeng's view, this also added a fire to the price increase tide of the entire condiment industry.
"Considering that the pressure on the cost side and the channel end of the industry this year is relatively large, after Haitian raises prices, it is expected that other competitors will most likely follow the price increase after a period of waiting and seeing, and the price increase cycle of the condiment industry has arrived." Chen Qingqing said.
This year, many food companies have raised prices
In fact, due to the rising cost of raw materials and transportation, it is not only Haitian Flavor Industry that has raised product prices.
According to media reports, on the morning of September 30, the market circulated a notice of angel yeast price increase, due to the sharp increase in the price of the main raw materials in the upstream, the company decided to increase the ex-factory price of some varieties from September 30, and the specific price adjustment varieties and prices are detailed in the local sales department notice. The relevant person in charge of the company responded to the media that the price increase was true and had been notified to the dealer.
Recently, with the release of the third quarter financial report, beverage giant Pepsi Cola also issued a price increase warning. In recent weeks, PepsiCo has raised the price of sodas and snacks as rising raw material prices have squeezed the original profit margins of the packaged food industry.
The picture shows Pepsi Sold in a supermarket. Photo by Xie Yiguan, a reporter from China News Network
In April, PepsiCo's "old rival", Coca-Cola, announced that it would raise the price of its products. Nestlé Group, also an international food and beverage giant, announced in July that it "will respond to higher input costs by raising prices in the second half of the year".
In addition, in August this year, the multinational food company Haoliyou also confirmed to the domestic media that the price of some pie products increased from September 1; the domestic food giant Dali Group issued a notice to distributors of the price adjustment of some products in the three series of food.
In the beer sector, Jan Craps, CEO of Budweiser Asia Pacific, said at a performance briefing on May 13 that the company's Budweiser and other brands have raised prices, including Budweiser and core and affordable brands nationwide.
Food companies raise prices, do you feel it? (End)
Source: China News Network