“Higher prices for dairy products are normal for the winter period, and are brought about by a price rise for gas and raw materials. As of next spring, prices will drop again,” the President of the Romanian Association of Milk Industry Employers (APRIL), Valeriu Steriu, told Business Standard. In terms of price evolution, Ponty estimates a 20-30 percent price rise on dairy products throughout the country, due to a shortage of raw material.
Danone faces a drop in production on the local market, following the scandal involving dioxin found in some of its products, which gives Israeli producer Tnuva the opportunity to gain ground on the domestic market. “There is sufficient space on the market and I believe we will witness other significant changes in this segment,” said APRIL’s representative.
Ponty said this year’s profit will not be affected by talks and problems involving the presence of dioxin in Danone products. “In the two weeks between the breaking of the scandal of dioxin in our products and the arrival of evidence from the laboratory, Danone’s dairy production dropped by some 15 percent,” said Radu Boitos, Manager of the Danone Romania plant. The Bucharest Danone factory has an annual processing capacity of 90,000 tons of fresh dairy products. Danone Romania posted a 20 percent increase in net sales in 2006, to €86.7 million from €74 mln in 2005, according to company data. Net sales of Danone Romania surged 45 percent in 2005 and 33 percent in 2004.
Danone is one of the world’s largest companies on the dairy, bottled mineral water, and biscuit markets, with an annual turnover exceeding €13 billion.
The annual consumption of dairy products is 4 kg per capita in Romania, compared to 15-16 kg per capita in Hungary and Bulgaria, and 33 kg per capita in France, according to APRIL.
