|
| |
Table of Contents |
| A. |
General Market Overview |
| |
Romania at a glance |
| |
Economic situation |
| |
Key Market Indicators |
| B. |
U.S. Market Position |
| C. |
Domestic/Third-Country Competition |
| D. |
Consumer-Ready Product Market Trends/Opportunities |
| E. |
Distribution System for Consumer-Ready Food Products |
| |
Domestic Food Processing Sector |
| |
Edible Oil |
| |
Meat |
| |
Dairy |
| |
Fruit & Vegetable |
| |
Brewery Industry |
| |
Appendices |
| |
General Labeling Requirements |
| |
Phyto-Sanitary and Veterinary Requirements |
| |
Association agreement EU/Romania |
| |
1996 Tariff Quotas/Import Duties EU Ag Products 1/ |
| |
1994 ROMANIAN IMPORTS OF AGRICULTURAL PRODUCTS |
| |
Other major suppliers agricultural products |
| |
Romanian Importers of Food Products:.............................
|
| |
Summary Statistics |
| |
|
A. General Market Overview
Romania at a Glance
Romania is one of the largest countries in central and eastern
Europe. It has a land mass of 237,000 square kilometers. As of
December 31, 1995, the population was 22.7 million a slight drop
from the previous year due to a lower birthrate and emigration.
About 55 percent of its population
lives in urban areas. Major urban areas include Bucharest (2.1
million) and another 25 cities with over 100,000 inhabitants each.
Demographics & Economic Situation
Source: Factbook.net During 1995, Romania made substantial progress
toward economic reform and
recovery. The Parliament passed long-awaited laws on bankruptcy
and mass privatization. The latter legislation will transfer free
of charge to the public a majority of the equity in nearly 4,000
state-owned companies, a process which will also create over 16
million new shareholders.
Foreign investments rose steadily during the course of the year,
with cumulative registered foreign investment reaching $1.6 billion
in December 1995 (up from $1.25 billion on January 1, 1995). Among
the U.S. companies making new commitments for example were Pizza
Hut, Amoco, Proctor and Gamble, Citibank, Reynold's Tobacco, McDonald's,
and IBM.
In November 1995, Romania reached an agreement with IMF on a one-year
extension of the fund's existing stand-by arrangement. This accord
further reassured foreign investors and international capital markets
of Romania's commitment to conservative fiscal and monetary policies.
The strong 1995 GDP
performance was Romania's best since 1984. It was based on a healthy
revival of industrial output, an excellent grain harvest, and increased
construction activity, especially housing in rural areas.
Despite steady improvement in the overall economic picture, Romania's
per capita GDP ($1,355 in 1995) remains the lowest in central Europe.
As a result, living conditions for much of the population are difficult.
The average gross monthly income in 1995 was about $135, an amount
insufficient to
provide a decent standard of living for most people. In agriculture,
the small size of Romania's farms (about two hectares on average)
creates difficulties for supporting efficient operations and generate
surplus income for new investments.
Romania continues to lag behind most other central European countries
with regard to development of the private sector. In 1995, the private
sector accounted for about 40 percent of GDP and employed an estimated
52 percent of Romania's labor force. In 1995, the private sector
accounted for about 14
percent of industrial output, 50 percent of construction activity,
70 percent of retail sales turnover, and 70 percent of farm production.
The short-term outlook for the economy will depend largely on the
success/failure of the mass privatization program which is underway.
During the period between January-May 1996 industrial production
increased seven percent compared to the corresponding period in
1995. However, other economic indicators are not as positive. Inflation
is forecasted at 35%, much higher than the GOR target. Devaluation
of the local currency and significant
energy imports have led to limited foreign exchange reserves. Exports
during the period were down 12 percent compared to the same period
last year and imports ten percent.
Despite the low level of per capita income the market for consumer-ready
food products should increase. Romanian currently imports $350 million
of consumer-ready products. The United States has a very small share
of this market with very tough competition from Western Europe and
Romanian's
neighboring countries. However, slowly Romanians are becoming more
aware of the quality and versatility of products the United States
can offer because of the extent of imported items such as clothes,
toys, cassettes, videos, etc. Of course, fast food restaurants such
as McDonald's have also illustrated a particular style of American
quality and consistency. Trademarks such as Mars, Coca-Cola, and
Pepsi have become quite popularized in the larger cities.B. U.S.
Market Position
The United States has had a very small share of the consumer ready
food market except for poultry meat. However, since July 1995, U.S.
poultry meat sales have fallen dramatically since Romania raised
the duty to 143 percent. It is unlikely the United States will regain
its market position in Romania for poultry meat because of the increased
tariff (Please see Romania Annual Poultry Report). The United States
has made some small gains in the sale of candy, gum, meat, dairy
products, etc. (Please see table at end of report - 1994 Romanian
imports). However, much work needs to be done to encourage imports
of U.S. snack food, proc/frzn fruit/veg, meat products, juices,
and pet food, etc..
C. Domestic/Third-Country Competition
For most high value products, import duties are comparable for the
EU and United States. However, European competitors (Germany, Italy,
France, England) are geographically better positioned to supply
the Romanian market. At the same time, many American brands are
produced under license by various European countries and then exported
to Romania. Romanian importers stressed that many European competitors
are following more aggressive promotional policies such as Government
trade teams, in-store promotions and attractive payment terms. As
an example, AgOffice witnessed an in-store promotion for French
yogurt at one of the highest class supermarkets. (In Romania, "supermarkets"
are the size of "convenience" stores in the United States.)
D. Consumer-Ready Product Market Trends/Opportunities
Fast food outlets, unknown until 1990 are becoming a fact of life
for Romanians. Although McDonalds started their operations in 1995
already there are five outlets in operation and another eight will
be opened before the end of 1996.
The younger generation and middle income families are crowding fast
food outlets and purchasing more and more imported snacks. Consumption
of imported candies, chips, peanuts, and popcorn is steadily increasing
because the quality of local production is no match for imported
products.
At the same time, Coca-Cola and Pepsi are the main producers/suppliers
of soft drinks in Romania. Both companies bottle domestically and
their sales continue to grow.
Another sign that there are growing opportunities for U.S. consumer-ready
products is the opening of an underground mall patterned after the
U.S. style in Bucharest. Although relatively small the mall has
many shops which sell items from the United States. Romania also
has several "ethnic" restaurants. One restaurant serves "Australian
Barbecue" along with famous name brand Australian beers. Although
relatively expensive by Romanian standards, especially for the type
of food served basically steaks, salads and french fries, this restaurant
is usually crowded with both Romanians and expatriates. An American
style restaurant featuring U.S. food, wine, and beer would likely
be just as popular.
The developing markets and supermarkets, increased tourist trade,
and a growing number of high class restaurants and hotels all indicate
increased prospects for exports of U.S. consumer-ready food products.
E. Distribution System for Consumer-Ready Food Products
Currently, Romanian food imports are handled by many importers,
both state-owned and private. Some importers also act as distributors.
Supermarkets or grocery stores are not directly involved in food
imports because they either lack expertise or financial resources.
Supermarkets have just started to open in Romania. Currently, there
are about ten stores in Bucharest and one in each large city that
could be considered "supermarkets". (By U.S. standards, these stores
are still fairly small, about the size of U.S. "convenience" stores).
In 1995, only about six percent of food was sold in "supermarkets".
Most food products are sold in smaller grocery stores or food kiosks
located throughout the city. Fresh produce is usually sold in outdoor
"farmers" markets. There are 15 wholesale markets located in Bucharest
in which both domestic/imported fresh/processed food products are
sold. Many of the small kiosks which usually sell cigarettes, juices,
candy, cookies, etc. purchase their products from the wholesale
markets.
Fast food restaurants such as McDonalds and Pizza Hut purchase wheat
flour, tomatoes, lettuce, etc. from the local market but meat and
other items like sauces are imported.
Hotels do not usually import directly from abroad but buy from local
importers/distributors.
The best way for U.S. exporters of consumer-ready products to enter
the market is to find a distributor/importer to represent their
product or company. This individual would be more familiar with
existing legislation, trading practices, etc. Without a representative,
sales will be extremely difficult.
Currently, Romania has no association of importers, distributors
or restaurant owners.
F. Domestic Food Processing Sector
Romania has a long tradition of producing and exporting food products,
especially to the former Soviet Republics and other former COMECOM
markets. However, product quality and packaging are at present not
up to international standards. Romanian food products are still
unsuitable for export to Western markets because of their relatively
low quality and high price.
The current problems facing the local food processing sector include:
limited raw materials, outdated technology, and poor facilities,
and equipment. Factories are usually overstaffed, therefore, work
productivity is low. Because of these factors, many operations face
relatively high debt and low profitability.
Edible Oil
This sector has good potential for future development. The oil industry
consists of 17 processing companies of which 12 are already privatized.
The combined processing capacity of the industry is about 1.6 MMT.
The raw materials used in the Romanian vegetable oil industry are
sunflowerseed, which is in good supply, and soybeans, mostly imported.
Production and use of other oilseeds (rapeseed, linseed, castor
beans) is very low.
There is a substantial lack of product diversification for refined
oil and margarine. Therefore, about 50 percent of the margarine
consumed in Romania and all shortening is imported. Almost every
year, Romania has sizeable exportable surpluses of oil. Raw oil
is exported versus refined oil since refining and packaging are
not up to international standards.
Meat
This industry faces major structural problems. The supply of raw
materials has decreased significantly since 1990 because of a dramatic
reduction of livestock inventory. Currently, there is overcapacity
in the industry because of the reduced number of animals. Generally,
equipment and technology are obsolete, therefore, the quality of
sausages and processed meats is low. Even when domestic demand picks
up, the industry will have excess capacity because of decreased
export markets.
The total consumption of fresh red meat and poultry, which includes
meat used for processing, is about 45 kilograms per capita per year,
much below the European average. Despite the importance of meat
and meat products in the diet, average consumption is low because
of lack of supply and relatively high prices compared to monthly
average income. Pork has the highest consumption rate in Romania,
followed by poultry, beef, mutton, and fish. Demand is also good
for sausages which are primarily used for sandwiches or breakfast.
Sausages are mainly pork-based.
Dairy
Like the other food processing industries, the dairy sector also
has underutilized capacity because of lack of raw materials. With
the little milk available, processors tend to manufacture cheese
rather than fluid milk because of higher profits. Imported ultra
pasteurized or shelf milk has become very popular here because of
the lack of local supply. Several types of cheese (mostly feta)
are produced in Romania however, there are numerous imported cheeses
on the market. Several companies are also producing mozzarella cheese.
This cheese has high quality and is much cheaper than imported Italian
mozzarella. Ice cream is also produced by most milk processing companies
but local supply and quality are much below domestic demand and
international standards. Overall, the current range of domestic
dairy products and quality are much below imported products.
Fruit and Vegetable
Romania used to be a strong exporter of processed fruits and vegetables
- in 1989, processed fruit and vegetable exports equaled US$30 million
but decreased to US$2 million by 1994. The 1989 export figure represented
50 percent of total production. The reason for the drastic decline
over these years is the decrease in production of processed fruit
and vegetables.
Currently, there are 40 industrial processing units with capacities
ranging from 2,000 to 30,000 MT. There are also about 60 small companies.
In 1995, only 26 percent of capacity was utilized.
Many companies in this sector will probably close down because of
excess capacity and competition from higher quality imports.
It is unlikely this sector will regain its share in the export market
until some major restructuring is accomplished for the following
reasons:
- Lack of raw materials (fruit and vegetable output was 65 percent
of the 1989 level) - Product quality has basically remained the
same since 1980 - Design and labeling are poor - Production costs
are high because of antiquated production lines and underutilized
capacity - Relatively high price of products due to high-priced
raw materials, high capital costs and large unsold inventories
Brewery Industry
There are 34 manufacturing companies with a combined capacity of
13.9 million hectoliters. The main problems facing this sector are:
limited supplies of raw materials (malt and malting barley), need
for modern sterilization and filtration equipment and lack of quality
control. Exports are currently very low and the local market has
been flooded by imported brands since 1990.
General Labeling Requirements
According to Romanian legislation, the label of packaged foodstuffs
must include the following information (preferable in Romanian language):
- product name; - brand - weight; - price; - shelf life; - ingredients;
- product use or preparation instructions; - nutrition value; -
storage recommendations.
All net quantities of foodstuffs must be marked in metric system.
Labeling requirements are not strictly observed or enforced. Many
labels are not translated into Romanian and lack such important
information as expiration date or shelf life.
Local consumers, who have been deprived for many years of good quality
foodstuffs, are attracted by good looking packaging and are ready
to pay a higher price for good presentation.
Usually, imported food items have a sticker with at least some of
the required information in Romanian such as manufacturer/supplier
name, ingredients, products use, and date of manufacture/expiration.
Phyto-Sanitary and Veterinary Requirements
For fresh fruits and vegetables, Romanian regulations require that
local importers obtain prior approval from phytosanitary officials.
Any meat and meat products, poultry and poultry products, including
canned products, soups, stews, etc., that contain meat or poultry
can only be imported from the United States to Romania if accompanied
by the appropriate certificate.
Association agreement EU/Romania
Because of an association agreement between the EU and Romania,
the EU receives lower tariff rates for several agricultural products.
The tariff rate assessed to the United States is the MFN rate. Therefore,
the EU has better trade access to the Romanian market than the United
States for these products and in the future, it is expected that
the market will become even more restrictive once Romania becomes
a full member of the EU. This will have an impact on the ability
of the U.S. to compete on the market.
Romania's relationship with the EU is governed by the Association
Agreement signed in 1993 which provides for a gradual phasing in
of a bilateral Free Trade Agreement. The Agreement provides improved
reciprocal access for certain agricultural products through lower
tariffs and reduced quantitative restrictions to increase bilateral
agricultural trade. However, according to Romanian officials, the
provisions of the Agreement have only encouraged EU exports to Romania.
ROMANIAN IMPORTS OF AGRICULTURAL PRODUCTS
| Major supplier Countries for AgriProducts |
|
| Consumer-Ready |
|
Misc. Food Products
Soups
Ice Cream
Frozen Desserts |
Brazil
Turkey
Hungary
Bulgaria
|
| Poultry Meat |
Brazil
Hungary
Turkey |
| Alcoholic Drinks |
Hungary
Moldova
Slovak. Rep |
| Fruit |
Ecuador
Turkey
Columbia
Costa Rica |
| Dairy Products |
Czech Republic |
| Beef |
Moldova |
| Coffee, Tea & Spices |
Indonesia |
| Meat & Prepared Foods |
Hungary |
| Vegetables |
Turkey |
| Sugar & Preps. |
Moldova
Brazil
Cuba
Turkey |
| Grains |
Turkey
Vietnam
China
Pakistan |
| Animal & Veg. Fats & Oils |
Hungary
Turkey |
Romanian Importers of Food Products:
This partial list of Romanian importers/distributors is provided for U.S.
exporters who would like to explore trade opportunities. U.S. exporters
should exercise caution in dealing with potential Romanian importers. They
should request financial/banking information from their Romanian partners.
Agroexport si Siloz Port Constanta S.A., 43 Brezoianu St.,
Bucharest, Phone (401) 614-6737, 615-2354, Telex 11141, 11142,
FAX (401) 312-0762, 311-2355
(Attn. Mr. Fanita Trita, General Manager)
Prodexport S.A., 1-3 Piata Valter Maracineanu, Bucharest,
Phone (401) 613-8833, 615-5593, Telex 11527,
FAX (401) 615-2107
(Attn. Mr. Mihai Sturz, General Manager)
Fructexport S.A., 1-3 Piata Valter Maracineanu, Bucharest,
Phone (401) 312-0112, 615-8148, FAX (401) 312-0113,
(Attn. Mr. Victor Stoiculescu, General Manager)
International Business Investment, 124 Mihai Eminescu St.,
Intr. A, Ap. 2, Bucharest, Phone (401) 619-3804, 619-2188,
FAX (401) 210-3248
(Attn. Mr. Aurel Antoniu, General Manager)
Silver Group S.A., 3B Boteanu St., Et. IV, Ap. 12, Bucharest,
Phone (401) 211-0655, 210-1367, FAX (401) 312-6233
(Attn. Mr. Dumitru Itu, General Manager)
Matra Int'l., 9 Dimitrie Pompei St., P.O. Box 41-17, Bucharest,
Phone (401) 312-7701, 312-7741, FAX (401) 312-7773
(Attn. Mr. Amine Matta, General Manager)
Agros International, 47 Toamnei St., Bucharest,
Phone (401) 211-5766, 211-5771, Telex 10022,
FAX (401) 210-0158
(Attn. Mr. Ioan Precup, General Manager)
ROMCAN Enterprises, 25 Pache Protopopescu St., Bucharest,
Phone (401) 250-7030, FAX (401) 250-7025
(Attn. Mr. Nicolae Boroi, Managing Director)
S.C. Mondexim S.A., 17 C. Mille St., Bucharest,
Phone (401) 323-7206, 323-8312, 615-4426,
FAX (401) 312-2128, 323-8312
(Attn. Mrs. Cristina Gitman, Executive Director)
Romagra S.A., 1 Hristo Botev St., Bucharest, Phone (401)
311-0332, 312-4645, 312-5509, FAX (401) 312-4646
(Attn. Mr. Ioan Aurel Moldovan, Executive General Manager)
diAPOLLO, 114 Calea Victoriei, 1st. Floor, Sector 1, Bucharest,
Phone (401) 210-4763, 210-5100, FAX (401) 210-9850
(Attn. Mr. Marian Tite, Export-Import Dept.)
Agrofood Business Consulting SRL, 43 Dr. Lister St., P.O. Box
35, Sector 5, Bucharest, Phone (401) 637-6417, 638-6981,
FAX (401) 220-2387
(Attn. Mr. Ion Sterpu, Managing Director)
S.C. SOREX SRL, 8 Einstein St., Cluj-Napoca, Phone (406)
443-2458, FAX (406) 443-2328
(Attn. Mrs. Aurica Bintintan, General Manager)
Agrom International, 192 Sos. Mihai Bravu, Bl. 204, Sc. A,
Ap. 24, Bucharest, Phone (401) 250-5154, FAX (401) 322-6190
(Attn. Mr. Alecu Leonard, Manager)
 |
Source: Romanian Official Statistics
|
Country Reports & Market Analyses
