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Cold Weather Drives Sales for Some Companies while Damaging others

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The FINANCIAL — Natakhtari Company and Tkbili Kvekana reported a 40-50% decrease in sales during the recent cold period in February 2012. Nikora JSC said it has also experienced a 4% decrease in sales.

 

The companies’ distributors failed to reach regions where traffic was limited due to snowfall. Given the recent cold spell consumption of electricity and gas has increased significantly at the majority of energy companies however. This has driven increased income for energy companies.

The consumption of electricity in Georgia increased by 6-7% according to the state energy system.

Last week some of the oil importers in Tbilisi raised the prices of gasoline. The cost of ‘Regular’ type gasoline increased by 5 tetri. 1 litre of gasoline now costs 2.15 GEL or 1.30 USD.

According to the official data of the state electro system, during the first week of February 2012 the amount of electro energy consumption increased by 6-7%. The total amount of electricity consumption in Georgia during the last two weeks was 32 million kWh, and in Tbilisi – 7.6 million kWh. During the same period of the last year the figures were 30 million kWh in Georgia and 7.1 million kWh in Tbilisi.

“The consumption of natural gas has also increased in recent days,” said Eka Saria, PR Manager at KazTransGaz. Some residents of Tbilisi have said that their gas consumption at home has increased by 30%.

“Given the recent critical meteorological situation, sales at our company dropped by 40-50%,” Dali Oniashvili, Sales Manager of “Tkbili Kvekana” (Sweet Country), told The FINANCIAL.

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“Regarding obstacles in transportation our distributors only managed to reach cities’ central streets, suburbs were totally paralyzed,” Oniashvili said.  

During the last two weeks of February in 2011 the turnover of the company Tkbili Kvekana was 150,000 GEL. In 2011 annual revenue of the company decreased by 15-20% compared to 2010.

“Over the past 4-5 years, during the winter period, sales of our company have dropped by more than 50%,” said Tornike Nikolaishvili, Marketing Manager of Natakhtari Company.

“Most of Kakheti, Kvemo Kartli, Shida Kartli, Akhaltsikhe, Imereti, Guria, Svaneti, Khashuri, Mtskheta-Mtianeti and part of Tbilisi were paralyzed for us, our distribution service simply could not deliver goods to these parts,” Nikolaishvili noted.

JSC Natakhtari (JSC Lomisi) is a producer/manufacturer. Beverage Group Efes became interested in its brewery activities in 2008; it then acquired 100% of the company. The company offers consumers three brands (Natakhtari, 3D and Efes) and three sub-brands of beer and seven sorts of soft drinks.

Nona Dzneladze, Head of the Marketing Department of Nikora JSC, says that the severe weather is affecting company sales. “The demand for some products decreases and for others increases. The difference is not radical. We can cite as examples the unloading indexes of several brands incorporated at Nikora JSC.”

“The realization of the brand Mzareuli, which produces convenience food products, increased by 4.8% during the days of most intense winter weather (from January 29 to February 4). As for meat products and Brand Okeanida, which offers fish products, sales dropped by 0.6% and 3.8% respectively,” Dzneladze said.

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In general realization at the Nikora JSC chain has grown by 12% compared to the past year.

“The difficulties in transportation caused some problems for Nikora’s distribution service. However the company is managing to supply its chain stores, as well as other stores,” she added.  

Nikora has its production in Poti, and factories in Kutaisi, Adjara and Kakheti, which significantly simplifies the work of the distribution service.

The annual turnover of Nikora in 2011 was 124 million GEL, although these figures are not final, as the company is yet to pass the declaration of revenue in March. “As the results of 2011 are not yet final, we cannot yet name the difference between 2010-2011,” Dzneladze said.

“Realization of our products has not dropped at all during the recent freeze. The freeze does not affect us. On the contrary, we netted a 20% sales increase. Our distribution service manages to get everywhere,” stated Shalva Alavidze, Head of the Marketing Department of Eco-Food, one of the leading dairy producers in Georgia.

Annual turnover of the company Eco-Food was over 30 million GEL in 2011. Annual turnover of the company increased by 17% in 2011 compared to the previous year.

 

 

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