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Romania Food and Drink Report Q4 2011
Business Monitor International, Sep 2011, Pages: 120
In BMI’s Food and Drink Business Environment Ratings (BER) table for Q411, Romania continued improving its matrix position, as a result of a more optimistic economic outlook for the country, which has subsequently boosted its rewards profile. However, the economic recovery is presently mostly export-driven, although we expect the Romanian consumer to also play an increasingly important part. In the longer term, the sizeable population of the country should stimulate investment into modern retail and premium products.
Headline Industry Data (local currency)
- 2011 per capita food consumption = +2.95%; forecast to 2015 = +25.77%
- 2011 alcoholic drinks sales = +4.24%; forecast to 2015 = +23.05%
- 2011 soft drinks sales = +4.95%; forecast to 2015 = +27.31%
- 2011 mass grocery retail = +7.29%; forecast to 2015 = +52.14% Key Company Trends
Romania Attracts Foreign Food Manufacturers – Foreign companies remain attracted by Romania’s low manufacturing cost. To this end, in July 2011, Greece-based privately-held food producer Olympus Foods made an investment of EUR55mn (US$80mn) for the construction of a new manufacturing plant near the city of Brasov in central Romania. Around the same time, German potato chips and nuts manufacturer Intersnack announced that it is to shut down its factory in Bulgaria to move production to a factory in Romania. Its EUR7mn (US$9.8mn) Romanian factory was opened in 2010.
Key Risks to Outlook Financial Austerities Depressing Spending – A major risk to the consumer outlook in Romania is the state of its economy. Romania faces a tough road of fiscal consolidation as the government implements drastic austerity in an attempt to correct its budgetary overspend. While the country’s low outstanding debt load will help ensure the sovereign’s solvency, we nevertheless see challenging times ahead for Romania, even though the worst of the government's fiscal austerity drive has peaked. Nevertheless, record demand for Romanian exports is catalysing robust expansion in Romania's manufacturing and industrial sectors.
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