More attention to small retail outlets and more active participation by producers in discussions about prices was called for by Zhivka Grozdeva, a producer and member of the Management Board of the Bulgarian Fruit Growers Association.
She took part in the third edition of the MORE THAN TRADE forum on modern retail, organized by the Association for Modern Trade in Sofia. This year's edition is held under the title „Everyone Is Talking. Myths vs. Reality“.
According to Grozdeva, the discussion would be more expert-driven if producers who work successfully with major retail chains participated in it more often. „Producers who have been working successfully with the chains for decades remain unheard,“ she said.
Small outlets sell at least half of the produce
Grozdeva said that she had not witnessed three-digit markups at major retailers. In her words, the average markup there is between 10 and 15 percent.
Small retail outlets are a more significant problem for producers, she noted. During the summer months, at least 50 percent of the fruit and vegetables produced in Bulgaria are sold through them, while markups are often very high.
According to Grozdeva, retail chains are the more reliable channel for consumers seeking food with fewer pesticides and fertilizers. She said that their requirements for pesticide residue levels are stricter than those of the Bulgarian Food Safety Agency.
„Bulgarian produce has a large market in the face of major retailers,“ Grozdeva said.
Irrigation and labor drive up production costs
According to Grozdeva, sustainable and predictable fruit and vegetable production is impossible without long-term irrigation. She noted that „Irrigation Systems“ covers around one-sixth to one-seventh of the country's cultivated areas.
The lack of predictability in production makes commercial relations more difficult. Another serious problem is the labor shortage, which leads to higher costs for wages and social security contributions.
„All of this leads to very expensive production—I would say, uncompetitive production,“ Zhivka Grozdeva said.She identified the administrative burden as a separate problem. In her words, there are calls to reduce it every year, but in practice it is growing.
Grozdeva described subsidies as an important factor for the sector. According to her, they will continue to be necessary if Bulgaria wants to preserve its own fruit and vegetable production.
Sources: bta.bg