Serbia Newsflash Week 30

Price of honey on the rise

The Beekeeping Association of Serbia (SPOS) has invited beekeepers for a preliminary application of honey for sale through the “Nas med” (“Our Honey”) facility. They are inviting applications with unlimited amounts of forest and acacia honey, which, as they say, will be sold at decent prices. Soon after this was announced, the purchase price of acacia honey increased, which according to the Association is a direct consequence of the invitation made by the SPOS facility in Raca. The SPOS facility is able to offer the best price because it is owned by association of beekeepers and operates without profit. More precisely, all the profit is built into the price, they say. “The price that the facility will pay for forest honey is fixed and known in advance and it amounts to  €5.5/kg. As for acacia honey, the price cannot yet be specified, as the price in the market is constantly growing, primarily because this was the worst season for the black locust tree in Hungary in the past 50 years. It is not expected that the price will not be lower than €4.6/kg” the press release says. The Association predicts the price to soon increase if the current market trends continue. (You can find out more about the honey situation in Hungary in this week's Hungary Newsflash.)

EIF secures €10 million for entrepreneurs in rural areas

The European Investment Fund (EIF) and the European Union announced the first loan transaction in Serbia funded through the Employment and Social Innovation (EaSI) Instrument. The package is worth €10 million, made available for the support of approximately 4 thousand micro companies in Serbia. The loan will allow Opportunity Bank Serbia (OBS), the only specialised financial service provider for micro and small enterprises on the Serbian market, to increase its outreach towards vulnerable entrepreneurs, particularly in rural areas. The bank will distribute the loans under terms more favourable than existing commercial loans, and provide entrepreneurs complementary education to improve their business management skills. The aim is to facilitate their access to micro loans and launch their own businesses, as well as support micro-enterprises through loans of up to €25 thousand. Due to this loan, the OBS will expand its portfolio of financial services especially to entrepreneurs operating in rural areas.

“This EaSI-funded transaction will enable the EIF and OBS to support more vulnerable entrepreneurs, including micro-farmers, across Serbia. This will contribute to the development of the microfinance sector in the country, strengthening its competitiveness and sustaining jobs, thereby contributing to improving the quality of life for local communities of small entrepreneurs,” said EIF CEO Alain Godard. EU Commissioner for Jobs and Social Rights Nicolas Schmit said that Serbia would be the first country to benefit from the programme.

European Commission quarterly report on candidate countries

In Q1 2020, Serbia registered a robust GDP growth of 5.0%, the European Commission said in a quarterly report on economic trends in EU candidate and potential candidate countries published this week. According to the published data of the European Commission (EC), Serbia has achieved a GDP growth of 5% in the first quarter of 2020, which is the best result in the region. As it was said, Albania had a GDP of -2.5%, North Macedonia had 0.2%, Montenegro 2.7%, Bosnia 2% and Kosovo 1.3%. Serbia also had a better GDP than Turkey, which had a GDP of 4.5%. The EC report refers only to candidates and potential candidates.

Over 70 products competed for the "Cuvarkuca" label

Last month, the Serbian Chamber of Commerce launched a campaign to promote localy produced products (more on the campaign over here.) A month later more than seventy products have been submitted for the "Cuvarkuca" trademark. This label means that the product is of the highest quality, that it was created in Serbia, and with using domestic resources. There were various products ranging from chemicals and pharmaceutics, to food products. The goal of the 'Created in Serbia' campaign and the 'Cuvarkuca' label is to support odomestic products and producers, strengthening consumer awareness of the importance of buying domestic products, and supporting the development of the domestic economy. The Director of the Sector for Strategic Analysis of Chamber of Commerce said that foreign brands can also get the label, and that the origin of the company is not a limiting factor. "It is only important that the product meets the requirements in terms of quality and the origin of resources. This means that such products are part of the local community because they use raw materials, workforce, knowledge, and creativity from Serbia."

MEGGLE reshuffles its production in the Western Balkans

The news that the German dairy giant is shutting down production in Croatia by the end of 2020 has upset the business community in the country, and raised the question of whether its production would be moving to Serbia. Officials of Meggle Serbia said that Meggle commented that this was not the case. The company MEGGLE operates in several markets in the European Union and in the region of the Western Balkans. Since 2011 Meggle has its own production facilities in Kragujevac, Central Serbia. “In every market where MEGGLE operates, the company develops independent and sustainable business models," Meggle Serbia stated. Due to problems and challenges in the Croatian market that had been present for years, the Management Board of MEGGLE has made a decision to restructure its operations in Croatia and to shut down the production plant in Osijek by the end of this year due to unprofitable production.

In Serbia, MEGGLE operates successfully, and in the past ten years, over €15 million has been invested in the modernization of a production plant in Kragujevac, and further investments are planned for the future. On a daily basis over 120 tons of raw milk originating from Serbian producers and farms are processed in the factory in Kragujevac. This implies that the shutdown of production in Croatia has nothing to do with Serbia, i.e. that the company will continue to operate in Serbia as before, according to the model it has in place for this country. Serbia’s main trump card is cheaper labor. The average salary in the country is around €500 as opposed to €900 in Croatia. “There are incentives for foreign investors in Serbia. Electricity prices are lower in Serbia than in Croatia. These are differences that every business operator takes into account” said a foreign investment advisor, Mr Kovacevic. Another important fact is that the Serbian market is bigger than the Croatian one, which is also exposed to greater competition as Croatia is an EU member state. Kovacevic also mentioned that Serbia’s free trade agreements with the EU, the CEFTA countries, Turkey, and the Eurasian Economic Union, also present invaluable export opportunities.

EU allocates €12.5 billion for the Western Balkans

The Western Balkans countries will have access to €12.5 billion through the pre-accession funds, the European Union's leaders agreed while discussing the pandemic recovery plan and the seven-year budget at the beginning of this week. That means that the EU will increase the amount for financing the candidate countries by almost ten percent in the next seven years. These are not the only funds Serbia and the Western Balkans can count on. There are European funds for sustainable development, as well as the EU Recovery Fund with €10 billion in grants available to the region.

Nothing can save the economy if there is no market

During an online meeting dedicated to the making of the new Regional Economic Agenda for the period until 2024, the Serbian Chamber of Commerce and the Chamber Investment Forum of the Western Balkan Six called on the governments of the region, the EU and all organisations involved in the process of building a common economic space to build it faster. A common market can support companies and alleviate work for the business community in these difficult times. The Chambers stressed the need of regional cooperation, removing barriers for business and establishing a joint market of the region now more than ever, adding that it was necessary to work faster and more efficiently on the creation of measures and implementation of the action plan for the following period. The meeting was attended by the representatives of the European Commission, CEFTA and the Regional Cooperation Council. 

Photo credit:
Cover: Belgrade by Luca Sartoni, via Flickr.
DIMG_2771 Honey for toast by Clarice Barbatounn, via Flickr.