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Canned food industry struggles to pass on costs

The canned food industry is struggling to keep its profit margins this year due to the weaker real. Companies consulted by Valor say they cannot pass on the total cost increase of imported food and packaging, priced in dollars. As a result, sales rise only in volume. According to the Brazilian Association of Food Industries (Abia), sales in the segment of canned vegetables and juices had a nominal gain of 6.97% from January to July, compared with the same period of 2014. Discounting inflation, sales are declining 1.2% in the year. Manufacturers expect at least a 10% increase in revenue this year, roughly in line with inflation. These industries also intend to pass on the recent dollar gains to retail in the fourth quarter. 


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