Slovenian food groups fear EU entry - report
products made in the rest of the EU - and the ending of export
agreements with some non-EU countries - is likely to lead to more
pressure on domestic manufacturers, according to the country's
Agriculture Ministry.
A spokesman for the ministry told the STA news agency that food manufacturers had until now been exempted for the most part from trade liberalisation, but that this would clearly change when the country joined the EU later this year.
Furthermore, Slovenian companies will also find it harder to export their products to a number of former Yugoslavian nations following the termination of several free trade agreements once the country becomes an EU Member State.
The loss of export markets in Croatia, Bosnia-Herzegovina and Macedonia is likely to be a major blow for Slovenian food producers, STA said, with many companies having profited from the competitive edge that the agreements had offered them to carve a not inconsiderable niche for themselves in those markets.
Slovenian trade with its former Yugoslavian neighbours has accounted for the bulk of food and drink exports in recent years, and the decline in sales there after 1 May 2004 - due mainly to EU rules on favourable subsidies - will be hard to make up by increasing sales to the country's new partners in the EU, at least in the short term.
This is mainly because most Slovenian food companies are still some way behind their EU counterparts when its comes to efficiency, safety and a number of other areas, all of which puts them at a distinct disadvantage when it comes to doing business with other members in the 25-strong trading bloc, the report states.
Earlier this year, the Slovenian Chamber of Commerce (GZS) warned that conditions in Slovenia's food industry were grave, calling on the government to do more to ensure that companies were in a position to compete effectively with their other EU counterparts, STA said.
Trade with the three other former Yugoslav nations accounted for $255 billion last year, the report said, with more than $119 million exported to Bosnia-Herzegovina alone thanks to the complete liberalisation of the market there.
Slovenian companies also took advantage of large quotas to export to Croatia and Macedonia, and while the EU will allow Slovenia to keep its agreements with these two companies, according to STA, it will mean a significant reduction in the quota levels. Slovenian companies exported $386.2 million worth of agricultural and food products in 2002, according to figures from the Slovenian Statistics Office cited by STA. Two-thirds of this went to the markets of the former Yugoslavia. The top destination for Slovenian food products was Bosnia-Herzegovina, followed by Croatia and Serbia-Montenegro. Topping the list of exports to these countries are beer, mineral water, soft drinks, dairy products and some meat products.
