Food producers cut prices, invest in promotion, but expect no Christmas miracles

Food industry producers expect flat sales for this December compared with December 2008 or an increase by no more than 5%.

These results would have been considered weak in a year with no economic downturn, as December used to bring the biggest sales for many markets in the food industry, but amid the current market conditions producers maintain even a 5% advance would be good.

"I am not expecting a miraculous beer sales rally in the fourth quarter of this year. It would be naive of me. Recession will continue in the last part of the year and the first part of 2010," stated Jan Derck van Karnebeek, general manager of Heineken Romania, one of the biggest brewers, with turnover worth above 225m euros. The beer industry was among the hardest hit segments of the Romanian industry in 2009. However, the segment suffering the most in December will be that of imported alcoholic drinks as the fourth quarter can bring as much as 35% of an importer's annual turnover. "(...) If importers manage to derive RON turnover similar with that of 2008, volumes on the entire market will be 10-15% lower on average than the ones generated last December," stated Pepe Berciu, general manager of BDG Import.

Also, the owner of CrisTim charcuterie producer estimates the 10% average drop in sales posted on the market so far this year will maintain in the last month of 2009.

Dairy producers' representatives maintain December will be a decisive month for this industry as, depending on December results the market will end the year either with a decline or increase in sales.

Flat sales this December from December 2008 is as a matter of fact the dream of all producers. Emilian Dobrescu, the representative of Agrana Romania sugar producer, maintains, though, that consumers' preferences have changed this year, with a rising number of people preparing at home what they could eat out.

To keep sales at the level of last year, producers will resort to promotional campaigns in December, too, at the same level or even bigger than in December 2008.