Affected By The Increase In Fuel, Gapmmi: Potential Production Ongos Rising 1 To 2 Percent!

General Chairperson of Gapmmi Adhi S Lukman. (Photo: Doc. Antara)

JAKARTA - The Association of Food and Beverage Entrepreneurs (Gapmmi) revealed that the increase in subsidized fuel prices (BBM) will have an impact on increasing production and logistics costs of the food and beverage (mamin) industry.

The increase will range from 1 to 2 percent of the total production and logistics costs of the industry.

"If the teaching industry calculates me, the fuel will be the biggest influence to the logistics, both upstream raw materials and downstream products. If in the industry itself we have proven resilient," said Gapmmi General Chair Adhi S Lukman when met in Jakarta, Wednesday, August 31.

Adhi assessed that assuming the increase in subsidized fuel prices by 30 percent from the current price, it would affect around 1 to 2 percent on logistics costs from the previous conditions.

Adhi detailed that fuel has a contribution of around 50 percent of the total logistics costs and the rest are costs for the costs of drivers, toll roads, and so on.

Meanwhile, logistics costs have a contribution of around 4 to 10 percent to the entire production cost so that the average logistics omgos.

"The average logistical effect is that distribution is around 4 to 8 percent depending on the value of the goods. The more expensive the percentage," continued Adhi.

However, Adhi said that his party prefers to reduce the profit margin rather than increase the selling price of products in the market in order to maintain people's purchasing power.

In addition, according to him, increasing the price of processed food is not easy because it has a supply chain and negotiations with retail that are quite long.

"So we are better off until the end of this year, we will try to reduce the margin first, while we are in the process of innovating and efficiency, so that the decrease in the margin is not too heavy," said Adhi.

Adhi believes that the increase in fuel prices will not greatly affect the increase in food prices in the country.

The reason is, the price of food raw materials has begun to show a downward trend in recent times.

"Incidentally, we are very lucky, the trend of commodity prices has begun to decline and is not as high as March to May. Just March to May, we survive, can we not survive now?," he concluded.