The Slovenia Times

Food, luxury cars or golf?



Slovenia's food and drink industry was heavily protected until 2004, mainly through our customs policy. Companies were able to generate healthy profits, which - fortunately - most reinvested into development, technology upgrades and improving product quality. Because of the so-called economic protection these companies were not forced to cut expenses or to source lower quality raw materials," according to Ales Kuhar, Ph.D., chair of the Agricultural Economics, Policy and Law committee and senior researcher at the Biotechnical Faculty of the University of Ljubljana's Zootechnical Department. "If we compare Slovenia's food and drink industry with its other manufacturing sectors, its achievements (production, added value, profits, growth trends) were well above the national average until 2000. When Slovenia entered the EU in 2004, the situation changed overnight. Imported food and drink products from the EU were suddenly customs free and the domestic market quickly became fiercely competitive. The key problem facing most of the local producers nowadays is their lack of competitiveness. They are being squeezed on two fronts - locally their market positions are being eroded by imports; and abroad their predominance among foreign producers in the ex-Yugoslav markets - the local industry's most important foreign markets - is under threat," says Dr Kuhar. How can Slovenia's food and drink industry become more competitive? "During the post-independence transition period, Slovenia's food and drink industry was not challenged with the hard-core restructuring processes suffered by other manufacturing sectors such as the wood, textile and metal industries. There was no need to be cautious about costs and restructuring. Fortunately, some companies were aware of the eventual need to enter the EU market and they are now reaping the rewards. Statistical data shows that both the import and export of food and drink products are on the rise. There are a few local companies with regional importance, but the size of the market says it all. It is hard to be competitive when your main competitor is producing your annual production in four days; or when the output of the largest European manufacturer of dairy products is one hundred times that of the entire Slovenian dairy industry. Cheese from that manufacturing giant is already being retailed in Slovenia and it is not hard to see that Slovenian companies can not compete with them on price," says Mr Kuhar. Customers can now choose between dairy products from a huge German dairy products manufacturer and smaller Slovenian companies. Whose products are they likely to opt for? According to Dr Kuhar: "It depends on the relationship or trust between the company and the consumer. I think that Slovenian consumers are disoriented. Or, perhaps, I should say that they are more orientated towards golf or their cars. The majority of consumers would rather pay 10% more for some extras in a new car than to eat quality food. We love to say how well we eat; that we are gourmets. But this is a lie. This is evident as soon as you enter some of the larger supermarkets. Retailers are selling mass-produced products, and their customers are snapping them up. I think that our nation still has to come to terms with the transition to a new marketplace; our immaturity in the way we eat and drink. When it comes to food and drink, we are generally very inflexible. This is a huge disappointment and Slovenian food and drink companies do not want to admit it. Previously, there was a level of ethical commitment among them; a commitment to produce quality products. Their mission was to feed the nation, which is not the case with global food and drink giants. Their primary task is to feed their owners with profit, not the nation with healthy and nutritious food. The concept of an agrifood industry developing in Slovenia rests solely on a higher intellectual approach to food - both its production and consumption. Slovenia will never be able to compete on price with the larger countries and companies. In Slovenia, there is only room for higher quality, not mass production. We have to ask ourselves, what and how do we want to eat? If we lean towards better food, then it means that it will cost us more."


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