Noodlemakers urged to stop giving gifts and discounts<\/p>\n
Tony Hotland, Jakarta<\/p>\n
The Indonesian Food Industry Association (Aspipin) has urged all
\nproducers of instant noodles in the country to stop giving free
\ngifts and discounts starting July 1 \"to restore healthy
\ncompetition\" in the industry.<\/p>\n
Aspipin chairman Bachtiar Yusuf explained on Tuesday that the
\nfrequent provision of discounts and free gifts had forced several
\nproducers to stop business because they were unable to compete
\nwith other producers who were able to sell their noodles at lower
\nprices and give prizes at the same time.<\/p>\n
\"This isn't conducive for new investment and the creation of
\njobs. Furthermore, the producers have forgotten to produce better
\nquality noodles because they're more occupied with how to sell
\ntheir products as cheaply as possible,\" said Bachtiar.<\/p>\n
He said competition in the sector was not healthy anymore
\nbecause many producers had been selling their products at a much
\nlower profit margin.<\/p>\n
\"For a healthy industry, the profit margin should be at least
\n30 percent. Now, many producers are operating with profit margins
\nway under 20 percent,\" he said.<\/p>\n
He cited an example of the significant increases in many
\ningredients over the years, which apparently had not resulted in
\nan increase in the prices of noodles.<\/p>\n
\"This means that those producers have been subsidizing the
\nprices to keep them low for the public, but most importantly just
\nto survive in the sector,\" he said.<\/p>\n
Bachtiar claimed that all members of Aspipin that produce
\nnoodles including the giant PT Indofood Sukses Makmur had agreed
\nto the proposal.<\/p>\n
\"Although Indofood is not a member yet, it has agreed to our
\nproposal. Indofood is an important key player since it dominates
\nthe market with a more than 80 percent market share,\" he said.<\/p>\n
He suggested that companies, which have allocated a certain
\namount from their budget to offer free gifts and discounts, use
\nthe funds to improve the quality of the noodles and to initiate
\nmore innovations.<\/p>\n
\"It's expected that in the future noodles can also be a
\nsubstitute for a meal, not only a snack. Noodles should be able
\nto meet the required calories,\" he said.<\/p>\n
Furthermore, Bachtiar said Aspipin had proposed to the
\nproducers to apply a minimum price for noodles, which would
\nlikely be higher than the current one, to attract new investment
\nin the sector.<\/p>\n
A pack of instant noodles now costs between Rp 600 (0.7 US
\ncent) to Rp 1,000. The country's total output of instant noodles
\nis about 12 billion packets per year, produced by some 18
\ncompanies.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/noodlemakers-urged-to-stop-giving-gifts-and-discounts-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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