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Producer: alcohol raw production materials may become pricey

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The costs of alcohol production will increase considerably next year when compared with this year, admits alcoholic beverages producer Latvijas balzams board chairman Intars Geidāns.

He says that 2017 has been very good for Latvijas balzams in the context of raw materials. «The situation is expected to change drastically next year, when prices of raw materials are expected to rise considerably. For example, the three main components – spirit, wine material and apple juice – will cost a lot more next year because of this year’s poor harvests,» admits Geidāns.
 

According to him, the company will have a tough challenge on its hands next year – making sure the costs of raw materials do not affect the end consumer and finding a solution different to the usual measure of increasing prices.
 

He also predicts there will not be any significant experiments with new brands next year. This is because consumers of products made by Latvijas balzams are relatively conservative. «All alcohol producers experiment with flavours. However, changes usually affect existing beverages,» explains Geidāns, commenting on current trends.
 

He adds that 2017 was not too different from previous years for Latvijas balzams volume or assortment-wise. «The most important development that took place last year was the release of Riga Black Balsam with cherry flavour. Consumers found it to their liking,» he said, adding that Latvijas balzams has added it to its base offer even though initially there had been plans to release it as limited edition.
 

According to information submitted to Nasdaq Riga, turnover of Latvijas balzams was EUR 55.54 million in nine months of 2017, which is 1.7% more when compared with the same period of 2016. Company profits have declined by 7.9% – to EUR 4.59 million.

BNN/LETA

21-12-2017
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