RIMI Advertisement Controversy: Fairness, Responsibility, and the Truth About Price Discounts

Advertisement is not an instruction

There is no reason not to believe that the products shown in the advertising posters really had a price discount. However, such behavior does not indicate a fair attitude towards consumers either. However, the advertisement is not an instruction, which buyers and users of goods must either read to the end, or take full responsibility for the consequences caused by ignoring the instruction. The advertisement is intended to create ideas or beliefs that RIMI will have cheaper flour products for the Christmas and New Year holiday marathon. Such a belief should direct more buyers to RIMI stores, past other stores, which are built next to each other in Riga and other places where the population has remained in Latvia.

Photo: Arnis Kluinis

However, consumers of advertising cannot be expected and required to memorize exactly the specific product, its manufacturer, packaging volume, etc., which can be learned from the advertisement in principle if the advertisement is studied in detail and subtly. It could be afforded by people waiting for public transport at stops where RIMI advertising posters were placed (pictured). Many have already done so while waiting for a bus or trolleybus. But a larger number of people passed by these advertising posters and could not perceive anything more than the fact that RIMI was offering a discount on bread.

Grain prices are half as low, but…

The possible direction of bread prices in 2023 and beyond until the 2024 crop harvest was studied by “Neatkarīgā” at the end of this year’s harvest and the industry experts summarized what they said on August 31 under the heading “Two times cheaper grain will bake the same expensive bread”. From a statistical point of view, the prediction is correct, if it coincides exactly, that the price of some flour products will be raised by exactly 40% and for others it will be lowered by exactly 40%.

Photo: Arnis Kluinis

RIMI has raised the price of flour products, in which the shopkeepers have added the added value to the flour used, but lowered the price of flour products produced by another manufacturer. The difference is also that the price reduction of “Latvijas maizniekas” products is a Christmas event (in the picture), but the discounting of RIMI small cakes would be strange at a time when price increases have not slowed down at all.

Competitors carefully watch each other

Inga Bite, public relations manager of “RIMI Latvia” referred to the price increase in general: “Rimi actively follows the situation in the market, taking into account both the prices of raw materials and the activities of competitors, so the price of a mini-cake of white bread is currently equal to the market price in other stores for an equivalent product, calculating one ratio of unit price and kilogram.”

That’s the whole answer, ignoring the question of how ethical it is to lure customers into stores with promises to sell cheaper products, the price of which is actually rising all the time. About a month ago, RIMI raised the price of its mini balls from 18 to 18 euro cents apiece. And just before Christmas, the price was raised to 21 euro cents per piece. On the one hand, it’s only a few Eurocents, but on the other hand, 6 Eurocents is 40% of the original price of the mini-coupon: 21×100/15=140.

I. Bite did not use such explanations that maybe the initial 15 euro cents was an advertising price, or that the prices for dough leavers, flavor enhancers, etc. have risen. to the ingredients of the mini-cake. The prices of the energy required for baking, which people are forced to follow, have not risen recently and have dropped significantly since ancient times.

RIMI’s practice of shifting responsibility for RIMI’s prices to its competitors has led to the question of whether they actually participate in raising prices in the relevant product segment. “Maxima Latvija” corporate communications project manager Raina Anna Ločmele claimed that “prices of flour products in Maxima stores have not fluctuated significantly in general”, but reserved the possibility of changing prices: “The prices of raw materials, which are currently very variable, can affect the price of the product.”

Inflation is not a thing of the past

Another reason to pay attention to the 40% increase in the price of small cakes was the coincidence of this increase not only with the pre-holiday period, but also with the work schedule of the Central Statistics Office. On December 8, CSB came out with calculations that “the average level of consumer prices in November increased by 1.0% during the year”. However, there is a difference between a price increase of 1% and 40% and even between 1% and 20%. Namely, in November RIMI raised the price of a piece of bread by only 3 euro cents, but the next price increase already applies to December, which was not included in the November inflation report.

• “currently we have survived the big wave of price increases and can recover in calmer waters” (Latvijas Banka, Ieva Opmane),
• “food price inflation will decrease rapidly, as the production of agricultural goods increases and demand is reduced by weak economic growth” (SEB, Dainis Gašpuitis),
• “the drop in inflation this year has been as rapid as the rise in inflation in 2022, and inflation in Latvia is currently lower than the eurozone average” (“Citadel”, Mārtiņš Āboliņš),
• “during the past two years, inflation was the biggest economic problem, but it has been solved” (“Luminor”, Pēteris Strautiņš).

Of course, the 40% increase in the price of a small piece of bread does not refute everything that the statisticians have calculated and the propagandists of the official opinion are trying to tell the public. These buns cannot occupy a significant place in the consumer basket, because no one buys them in bulk. Their purpose is to be eaten warm, if not literally, then figuratively. Only then does the bread have all those taste qualities, because of which people are willing to pay 3 euros per kilogram now, which is several times more expensive than the cheapest white bread. Those who need to save every euro cent will find the cheapest goods. However, claims about inflation remaining in the recent, but still past, are also unfounded.

2023-12-27 03:15:30
#Christmas #prices #cakes #bread