Opportunities in the Balkans

Assisting Bulgaria and Romania in catching up with older EU states might be a promising opportunity for Hungarian enterprises in the food and retail business. At the moment, the 30 million new EU citizens spend 40-50 per cent less money on food than the consumers in more developed markets and 15-30 per cent less than Hungarian consumers. Contrary to expectations, there is no sign of the dumping of cheap food from Romania and Bulgaria on the Hungarian market yet. Experts told us, that most Hungarian businesses focus on Romania at the moment. Agricultural prices are 10-15 per cent lower than in Hungary, though safety hazard is considered to be higher. Retail enterprises see expanding demand as a result of the growing standard of living. Lower agricultural prices are somewhat offset by the less developed logistic system and infrastructure., which make bulk purchases more difficult. According to a study by Zoltán Fórián from Agrár Európa Kft., retail trade in smaller communities is changing as well, since the food trade is channelled into organised and regulated structures as a result of the introduction of EU standards. According to Katalin Neubauer, sales manager of CBA, Romania where they have been present since 2003, means new customers for them primarily. György Vámos, the general secretary of the National Retail Association says that one month is not enough time to come to meaningful conclusions, but the absence of scandals is a good sign. In the opinion of János Dudás, director of Agro Legato Kft., Hungarian investors should buy food processing businesses in Romania now, whereas later the country might well become a net exporter of food as a result of investment by big multinational chains. Bulgaria is different, since their cheap but good quality dairy, fruit and vegetable products are expected to appear in our markets soon.