Boston, MA -- (ReleaseWire) -- 01/09/2014 -- The recovery of the Romanian economy is gathering steam, and we forecast real GDP growth to accelerate from 0.7% in 2012 to 2.6% in 2013 and 2.8% in 2014. While the growth will be largely driven by the country's robust exports, strengthening domestic consumption is expected to become an important supporting factor. In the coming quarters, Romanian consumers will benefit from the minimum wage and pensions increases as well as modestly easing credit conditions. The improving macroeconomic conditions and rising consumer disposable incomes are expected to set a firm foundation for moderate growth in Romania's food and drink sector over the coming years.
Headline Industry Data (local currency)
- Per capita food consumption growth (year-on-year, y-o-y) in 2013: +4.86%; compound annual growth rate (CAGR) to 2017: +5.47%
- Alcoholic drinks sales growth (y-o-y) in 2013: +5.08%; CAGR to 2017: +8.54%
- Soft drinks sales growth (y-o-y) in 2013: +5.02%; CAGR to 2017: +6.39%
- Total mass grocery retail sales growth (y-o-y) in 2013: +8.73%; CAGR to 2017: +10.17%
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Key Industry Trends And Developments
Coca-Cola Opens New Bottling Line For Juice Brand: In November 2013, The Coca-Cola Company has opened a new bottling line for its Cappy Pulpy orange juice brand at its production facility in Ploiesti, Romania. The company invested EUR22mn (US$30mn) in the new bottling line, which has a production capacity of around 36,000 bottles per hour. The move aims to expand the availability of the Cappy Pulpy beverage throughout the Eastern and Central European region.
Romanian Regulators Approve Auchan's Purchase Of Metro Hypermarkets: In August 2013, regulatory authorities in Romania have approved the sale of 20 hypermarket premises in the country owned by Germany-based retailer Metro. The stores will be acquired by French grocery retailer Auchan in a deal that will make it the second largest retailer in Romania. Competition authorities have been reviewing the proposal since its first announcement in November 2012. The stores in question will be those owned by Metro's Real hypermarket brand.
VAT Cuts To Bread: Value-added tax rate for bread will be cut from 24.0% to 9.0% starting September 1 2013. The tax reduction will have a positive effect on bread production and sales, as it will reduce the shelf prices for the bread products. While we maintain our current forecast for bread sales to expand by a compound annual growth rate of 2.9% to 2017, the figure is likely to be revised upwards over the coming quarters.
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