When bread prices raised, Valkhleb, a bakery, asked the krai and city for help in holding down prices. Here is a letter it wrote, published in the Vladivostok Times Sept. 9. 1998
Dear residents of Vladivostok:
The staff and Board of Directors of Vladkhleb can't keep silent in the current wild situation when prices for all existing products are skyrocketing unbelievably. And while we somewhat indifferently watch enormous figures on price tags for delicacy products, every kopeck of extra charge for the staples … causes a real panic. We perfectly realize that, and that's why we have kept bread prices affordable for all this time.
Even after the fall of prices we have tried to keep the past prices for as long as possible.
At the moment all our reserves are exhausted. Stocks of bread-baking ingredients such as flour, sugar, butter and the like are running out. To buy what we need at reasonable prices is virtually impossible today.
However, we cannot temporize. We all need bread every day, which means we will be forced to buy everything we need at much higher prices. What this means perhaps doesn't need to be explained.
The cost of bread closely depends on ingredients. Another financial crisis has led to a 50-300-percent increase of prices for butter, vegetable oil, all types of margarine, yeast and other as of September 1. All these prices continue to grow every hour.
Because of this, Vladkhleb came to the critical point where it is necessary to raise prices of its products. Otherwise, we will just destroy a most powerful bread enterprise. Should Vladkhleb shut down, the bread price will get out of hand. Our economists projected the situation for the near future considering the growing flour cost. With the cost of flour at 2.18 rubles per kilogram at the start of September, the retail bread price was to be 4.36 rubles. With an increase of flour cost to 4 rubles per kilogram, bread price will grow to 6.17 rubles. Further growth will be possible.
So it turns out that bread may rank with delicacy products. Is there another way out? Yes. It is already put into practice by leaders of other cities and regions. For example, Moscow Mayor Yury Luzhkov used the press in the very first days of the crisis to tell the residents that he had decided to subsidize the bread industry so that not to allow prices for this type of food to rise. There were no objections. So did Khabarovsk -- there they pay subsidies for bread-baking ingredients.
Incidentally, the city and krai administrations already have the experience of supporting our plants. Rather than artificially holding back prices, they employed loans and waivers and the like. At this point all the city and krai offices of authority as well as deputies at all levels could consider our propositions such as:
+ Granting waivers on taxes to krai and city budgets;
+ Establishing lower prices for electric and thermal energy for a program of bread
production;
+ Facilitating in reception of customs duty and tax waivers from the federal
government for imported grain;
+ Recovery of Pacific Fleet's debts in the amount of 6 million rubles (calculated as
of August 1998) for supplied products;
+ Lowering rent for premises and plots.
Any of these possible measures will help Vladkhleb contain the growth of prices for its products. Despite of our SOS signal, no measures have been taken as yet. We have found ourselves in the same situation as any of you. We see the situation changing steadily for the worse. We will not cope with that alone.
We see last recourse: Raise the bread price minimally and cancel our free plastic bag service. But what is next? This is the concern of all the 700 employees and the board of Vladkhleb.
Every extra kopeck in the cost of bread upsets you and us very much. Making our sincere apologies for a forced increase of the bread price, we hope for your understanding and support. Today and tomorrow we are with you, as usual.
Board and staff of Vladkhleb.
