CEE retail confidence soured
cutting corners and risking consumer health by selling out-of-date
produce to achieve strict targets.
Leading global retailers such as Ahold and Tesco have been found guilty of re-labeling out-of-date meat products to cut costs in the highly competitive CEE markets and the threat of small fines will not deter them.
In September 2005, the Czech Republic's State and Agricultural and Food Inspection Office (CAFIA) identified four kinds of re-labeled packaged meat products with a new label extending the original durability date by 2 - 4 months at an Ahold owned Hypernova store.
In October alone the CAFIA received more than 200 complaints from shoppers, which they said is the largest influx of complaints they have ever experienced.
Boris Planer, Global Macro-Economic Manager at Planet Retail told FoodandDrinkEurope.com: "CEE food retail markets are so competitive, most are generating losses. It takes six or seven years for many retailers to make any profits. There is a lot of pressure on individual store managers to meet their targets."
The falling standards of the large retailers have however helped out the smaller retailers.
"It has been a fantastic few weeks for smaller retailers who consumers have more trust in, they are booming at the moment" said Planer.
The problem of re-labeling and repackaging products has been discovered in Poland, Slovakia and the Czech Republic.
Random checks in the Czech Republic revealed staff had been directed by their managers to break the law, and change sell-by-dates on cheese and meat products.
The CAFIA is investigating continued breaches of food legislation by retailers who are selling old, out-of-date products.
This year they inspected 4,500 stores and over half had shortcomings. Although this was not an increase on the previous year, the violations were much more severe.
The current penalties being imposed in the CEE are nothing more than a drop in the ocean to the multinational organisations, which means this has been allowed to continue.
Slovakia can currently only impose a maximum €25,000 fine, and retailers in the Czech Republic face a maximum of €100,000.
Last week Slovakia's consumer ministry visited 350 supermarkets and at least 50 fell short of the required standards.
However due to the level of hostility in these countries towards the large companies moving in, the Governments have finally decided to act.
"This is ridiculously low to a global multiple, it is nothing to big players such as Carrefour, Tesco and Ahold. The Governments are looking to increase these very strongly so the penalties will finally hurt." said Planer.