Bulgarian Expert Predicts Big Damage from Russian Ban on Food Imports

Business | August 8, 2014, Friday // 16:02| Views: 1477 | Comments: 3
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Bulgaria: Bulgarian Expert Predicts Big Damage from Russian Ban on Food Imports Plamen Grozdanov, Executive Director of the "Made in Bulgaria Union", photo by BGNES

Plamen Grozdanov from the "Made in Bulgaria Union" has predicted huge losses for many Bulgarian companies due to Russia's 1-year ban on food imports.

In a Friday interview for the Bulgarian National Radio, Grozdanov, former Ambassador of Bulgaria to Russia, suggested that Bulgaria had negligible or no exports of milk and dairy products and chicken meat to Russia, adding that the obstructions to a promising market such as the Russian one would have a substantial negative impact on many small and medium-sized companies.

Russia announced Thursday it was imposing a 1-year ban on food imports from the EU, US, Canada, and Norway. The product list included meat, dairy, fruit, and vegetable imports. Dmitry Medvedev made clear that the ban was effective immediately.

"Some companies have made substantial investments on this market over the past few years and this ban can really create serious problems for them. When a market is closed, it is very difficult to return to it," Grozdanov stated.

He noted that the Made in Bulgaria Union had distributed a declaration urging the government to stop watching in silence and take decisive steps, demanding that Bulgarian exporters be compensated and seeking to secure alternative markets for them.

Grozdanov pointed out that the export of that group of products amounted to as much as EUR 12-14 B, meaning that the ban would result in over-production and surplus quantities on a common market in which Bulgaria was a participant.

He argued that the trend would automatically lead to tougher competition and possible unfair commercial practices, including dumped prices, on certain markets.

"Taking into account that foreign goods of this type are much more subsidized than their Bulgarian equivalents, as well as the different conditions for producers in other EU countries, a steep price decrease, which others will be able to afford for a certain period of time, will be absolutely unaffordable for Bulgarian producers," Grozdanov reasoned.

He went on to suggest the Arab market, Germany and the Far East as alternative export destinations.

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» To the forumComments (3)
#3
Warfou - 9 Aug 2014 // 03:33:12

My humble advice is to export Rakia, apricot juice, rose jams + others, quality wine, honey, lutenitza, all sorts of "sirene", spices + some quality ceramics. These Bulgarian products are very good and would find many buyers abroad. I am not sure if German market is best for them because it is very competitive, full of everything from the whole world and with no particular associations to Bulgaria, but countries like CZ, PL, SK, RO, HU are those where Bulgaria is easily identified and are good to export to. I can recall Bulgarian apricot juice from my childhood yet in socialist times, the bottles were awful, but the content was great. Today's Bulgarian made Cappy product, is almost as good but though it is a Coca Cola brand, I can't get it at home. Having these products here would also boost tourism to Bulgaria.

#2
Warfou2 - 9 Aug 2014 // 03:01:39

You don't have to believe anyone and instead of looking for a pro-Russian specialist we better look to who is trying to make us believe that this sanctions will not have much impact.

It is true Bulgaria will not feel that much direct from the Russian sanctions simply because Bulgaria's economy and especially the niches we are talking about is already many years destroyed by the cheap import from other EU countries where they heavily subsidise and export very cheap.

BUT, since all this food is going to be dumped on mostly the EU market there will come a huge price decrease. Which will cost a lot of jobs and make an end to SME's who already had it very difficult to compete with the much higher subsidised goods from EU/US.

And when you're balancing on the edge of deflation and recession this will have huge consequences. Mostly for the people working in the sector. 5% of the jobs will go lost and probably never return, same amount of SME's will disappear for good. For Bulgaria this isn't that bad but many other countries will feel this hard, very hard.

#1
stoenv - 9 Aug 2014 // 02:03:58

A Tale of Two Plamens

Plamen Grozdanov does not quantify the share of Bulgaria's export and yet, bravely describes above nightmarish scenario in which " the obstructions to a promising market such as the Russian one would have a substantial negative impact on many small and medium-sized companies". This Plamen is labelled in the title of the article an expert.
At the same time in Novinite.com one finds the opinion of Plamen Dimitrov, President of the Confederation of Independent Trade Unions in Bulgaria, who concludes that "So far, the list of imported products that Moscow has banned will affect no more than 2% of Bulgarian exports - mainly of raw fruits and dairy products" and says that " Bulgaria's exports will suffer losses no greater than BGN 18-20M"

Now answer the following questions: whom of the two Plamens are we to believe? Who of them is lobbying for Russia in this stand off and why? Whose statement is more responsible and why? And finally, what is better for Bulgaria in the long run-being pro-Russian or pro EU?