Ritter bids farewell to Russia in foreign strategy shift
Russia and back to Germany to use the same milk materials for
products sold the world over.
Part of the reason for the move is to save costs, as the confectionery manufacturer was importing alpine milk from Germany to achieve the desired taste, thereby unnecessarily increasing expenses. "Customers worldwide now recognise the distinct taste of our chocolate," Thomas Seeger told ConfectioneryNews.com . "Because Russia's milk and sugar has a very different taste, we were importing alpine milk from Germany, which does not make sense." The move also represents a shift in strategy for the company. Seeger added: "We are focusing our foreign market on increasing distribution and producing the chocolate in the same place." The confectionery manufacturer invested $20 million to open up production lines on the outskirts of Moscow in a joint-financed project with Russian company Odintsovo Confectionery in 2003. Ritter Sport opened the facilities to produce an estimated 10,000 tonnes of chocolate a year, but said it will continue providing its chocolate bars to Russia from Germany. Its decision to move production back to Germany made the news this week, with International Herald Tribune attributing the reason to the price increases of quality raw materials, which was driving up production costs and forcing the company to import ingredients. The cost of commodities spiralled last year, as the price of oil reached a high of $100 per barrel and weather-induced crop failures led to an undersupply of raw materials and volatility in the market. However, Seeger rejected these suggestions, saying that while cost was an issue for the company, raw material price hikes were not a contributing factor to the business move, contrary to the reports. Media also suggested that chewing gum producer Wm Wrigley Jr Company may have contributed to the decision, as last year it acquired 80 per cent of the chocolate maker A Korkunoc, which owns the Odintsovo plant. It has apparently said it would buy the remaining 20 per cent over time. When commenting on the influence of Wrigley, Seeger said that while the quality of Korkunov was a reason for moving facilities to Russia, Wrigley's acquisition was also not a major influence for returning to Germany.