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The black market and low prices demanded by retailers melt meat producer profits
The cold meat industry, one of the most profitable sectors in recent years, has been affected by the crisis in 2009, with most producers satisfied just to survive. They no longer expect profits, as the crisis has forced them to resort to aggressive promotions, as consumers opt for less expensive products, and the black market share exceeds 50 percent.
In the coming period, a market reshuffle is expected, with top acquisitions not excluded, and some small producers to disappear, and their market share to be taken over by sold companies.
“I do not think that we, those who work on the white market, will have a profit this year, or maybe, in the best case, we are talking of an insignificant profit of 0.1-0.2 percent,” Sorin Minea, President of the Angst group of companies, told Business Standard.
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“Most of the market went over to black this year, and those producers who resisted registered declines between 5-15 percent. We are practically competing with a parallel market. On the one is a clean market, on which all are authorized and respect European legislation, and on the other, producers, who are only registered, do not have a limit on quantity, and can produce the same quantity as we can working in garages and unhygienic areas,” added Minea. He went on to say that the market is characterized by generalized chaos, with black market trade exceeding 50 percent of the ratio, and small, neighbourhood stores stocked with goods by producers who no one has ever heard of.
Read more in Business Standard
Autor:
Dragos Serban
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