2012-02-03 16:39:00 - Serbia Food and Drink Report Q1 2012 - a new market research report on companiesandmarkets.com

The fundamentals of the Serbian economy remain relatively strong thanks to IMF-supervised macroeconomic stability, strong foreign direct investment inflows and export competitiveness. However, the current GDP slowdown seems to be dictated mainly by a softening in domestic demand, as indicated by the downward trend of retail sales. In addition, rising economic headwinds originating in the eurozone are posing downside risks to our forecasts, and we now expect the country´s real GDP to expand by 2.3% in 2011, down from 3.2% previously.

Headline Industry Data (local currency)

- 2011 per capita food consumption: +3.98%; forecast to 2016: +22.51%
- 2011 alcoholic drinks sales: +3.73%; forecast to 2016: +21.08%
- 2011 soft drinks sales: +5.5%; forecast to 2016: +30.3%
- 2011 mass grocery retail sales: +8.7%; forecast

 

 

to 2016: +54.0%

Key Industry Trends

Lidl Looks to Enter Serbia: German discount giant Lidl is reportedly looking to enter the Serbian market, aiming to open 20 stores in the country as part of its plans for expansion in south-east Europe. The retailer has registered in the country under the name Lidl Serbia Supermarketi with the initial capital of EUR20,000 (US$27,767).

MK Sunoko Looks for Expansion: Sunoko´s owner, MK Group, has recently revealed that it has submitted a non-binding offer for a controlling stake of 82.33% in Greek sugar refiner Hellenic Sugar Co. The deal would open up markets for the company not only in neighbouring Macedonia, Bulgaria and Albania, but also with Greece, which is the primary buyer of the commodity from Sunoko. On an annual basis, Serbia exports around 100,000 tons of sugar to Greece worth between EUR70mn and EUR80mn, accounting for 65% of an annual sugar export quota the country has with the European Union.

Key Risks To Outlook

Slowdown In External Demand: Although not our core scenario, we highlight that, were the eurozone to drop into a more severe recession over the coming quarters, a more pronounced slowdown would occur in Serbia. In this case, a recession in the Balkan country could not be precluded, as remittances inflows would dry up, internal demand would be squeezed, and foreign direct investment inflows would moderate.

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