Competitiveness in the Bakery Production

Products of enterprises of the bread-baking industry are different. Rye-bread, rye and wheaten bread, wheaten bread (first-rate and second rate flour), white bread (rolls and buns of the superior quality, first-rate rolls and buns, and second-rate flour), and other sorts of dietary bread are baked most widely.

Taking into account the physical and qualitative characteristics of the products, including such peculiarities of the products, that pose obstacles to their transportation at great distances, the technological links between producers and consumers, the places where specific groups of consumers are situated, etc. one can say that markets of bread, rolls, and buns are regional. Limits of regions or limits of their significant parts as well as limits of large cities are, as a rule, territorial limits of those markets.

Having taken into account the state of affairs on the markets of bread, rolls, and buns, the Cabinet of Ministers of Ukraine by its order of July 27, 1995 No. 464-p adopted a decision to fulfill the pilot project of demonopolizing, in the course of privatization, the Production and Trade Enterprise “Volynkhlib” for the purpose of preventing negative consequences of privatizing, as a single property complex, such enterprises (amalgamations) that comprise technically independent structures (bread-baking plants, bread-baking combines, etc.).

Privatization of the mentioned enterprise was carried out with due regard for the results of the pilot project of its demonopolization which resulted in the creation of competitive environment on the market of bread, rolls, and buns within the Volyn region. For the time being, due to the implementation of the project, there are 46 independent enterprises which operate on the market of bread, rolls, and buns within the Volyn region. Competition between them resulted both in stabilization of work of the privatized enterprises and in the decrease of prices for products of nearly all subjects of the market. In addition, some bread-baking plants gave discounts within 7 to 10% on their products which are sold to boarding schools, ordinary hospitals, hospitals for invalids of war, old people’s homes.

Proceeding from the results of privatization and demonopolization in the bread-baking industry of Ukraine, one can conventionally mark out the following three groups of regions.

The first group comprises the regions where the complete demonopolization of amalgamations (enterprises) of the bread-baking industry was carried out (the Vinnytsia, Volyn, Dnipropetrovsk, Zhytomyr, Transcarpathia, Zaporizhia, Ivano-Frankivsk, Kirovograd, Lviv, Poltava, Mykolaiv, Rivne, Ternopil, Kherson, Khmelnytsky, Cherkasy, Chernivtsi, Chernigiv regions). In those regions, the markets of bread, rolls, and buns are highly competitive because privatization of enterprises (amalgamations) of the bread-baking industry has been carried out alongside with the separation of independent enterprises or alongside with the establishment of groups of enterprises whose shares in the regional markets of bread, rolls, and buns are insignificant.

The second group comprises the regions where partial demonopolization was carried out (the Donetsk, Odesa, Kharkiv, regions). Activities of “leaders” being privatized enterprises (amalgamations) of the bread-baking industry whose share in the regional market of bread, rolls, and buns is significant (nearly 35%) while shares of other enterprises are within 5 to 10% constitute a characteristic peculiarity of those regions. The Public Corporation “Korovai” (the city of Kharkiv) comprising 6 bread-baking plants, the Public Corporation “Odesky Karavai” (the city of Odesa) comprising 7 bread-baking plants, the Corporation “Donbaskhlib” (the city of Donetsk) comprising 10 bread-baking plants are enterprises being “ leaders” in the mentioned regions.

The third group comprises the regions where markets of bread, rolls, and buns are monopolized. They include the city of Kyiv and the Kyiv region (the Public Corporation “Kyivkhlib” comprising 18 bread-baking enterprises), the Lugansk region (the Public Corporation “Korovai” comprising 14 bread-baking plants) and the Automonous Republic of the Crimea (the Enterprise “Krymkhlib” comprising 10 bread-baking combines). The shares of the enterprises in the mentioned markets in those regions amount to 80%.

Ex. 1. Read and translate the text.

Ex. 2. Answer the following questions:

1. What kinds of products of bread-making industry do you know?

2. What makes the markets of bread, rolls and bans regional?

3. What decision was adopted by the Cabinet of Ministers of Ukraine in July 27, 1995?

4. Into how many groups are bread making enterprises devided?

5. In what way are the bread making enterprises devided?

Ex. 3. Read the following false statements and correct them:

1. The Ukrainian products of the bread-baking industry are very few.

2. The markets of bread, rolls and buns are not regional.

3. The first group comprises the regions where the complete demonopolization of enterprises of the bread-baking industry wasn’t carried out in a full degree.

4. The second and the third groups have undergone a complete demonopolization.

5. The shares of the enterprises in the third group amount to 30%.

Ex. 4. Translate into Ukrainian:

It should be pointed out that enterprises (subdivisions) of consumers’ cooperative societies have a significant share in the markets of bread, rolls, and buns in rural areas. Competition struggle between them and privatized bread-baking enterprises becomes stronger as a result of washing away traditional limits of sale of their products.

Further development of competition on the markets of bread, rolls, and buns in many cases is restrained by local bodies of executive power by means of their establishing different prohibitions or limitations with respect to free sale of products. That is why, alongside with the completion of privatization of enterprises of the bread-baking industry which was carried out simultaneously with privatization, the mentioned practices must be stopped, which will make it possible to form finally markets of bread, rolls, and buns on the basis of competition to the interests of both consumers and producers.

UNIT 31