The pandemic caused by the coronavirus has led to the reduction of many activities that support the economy or even to their suspension. Although the food sector continued to operate, the units in the bakery industry were divided into two camps: bakeries that have contracts with hypermarkets and bakeries that sell their products through their own stores or through other local partners. The bakery units in the first category were less affected during this difficult period, while the others faced massive drops in sales, even more than 50%.
Association BREAKING, represented by the president Aurel Popescu, claims that it intervened with the state authorities to help entrepreneurs in the milling-bakery sector. Unfortunately, none of the promises received were put into practice, which led to the rethinking of sales policies for many of the manufacturers and traders.
Measures, challenges and actions
What were the main difficulties faced by producers in the bakery industry during the state of emergency?
AP: The main difficulties that arose during this period were those related to price increase, ensuring the wheat requirement for baking, especially for the months of May - June when it was not possible to make contact with the new harvest, de supply with yeast, which recorded historic sales at the bottom of the market, and, of course, difficulties in provision of hygiene and sanitary materials for own staff and production units.
As the president of the most important association in the milling - bakery sector, what measures have you taken or are you taking to support the members of the association in order to reduce the effects of the current crisis?
AP: ROMPAN intervened with the leadership of the Ministry of Agriculture and Rural Development (MADR), the Prime Minister of the Government and the other State institutions (ANSVSA, ANPC) to support our members. The proposals we made were the following:
● allocation of a quantity of wheat from the State Reserve, which will ensure the necessary wheat for the months of May and June;
● granting loans with 50% subsidized interest and guaranteed by MADR for mills that purchase wheat for the entire harvest year;
● application of a state aid scheme for submitting projects in order to modernize existing units or build new units.
Unfortunately, the requests submitted to the state institutions were not put into practice. The government did nothing to help the food industry during this period, which led to declining sales or even bankruptcy. Many companies closed their operations, sent their employees to unemployment and some of them could not resume their activity due to the acute lack of financial resources.
Bakeries that had contracts with hypermarkets were less affected by the pandemic. Do you think this will increase the control of the big chain stores in the bakery market?
AP: Indeed, during the state of emergency and even the state of alert, many customers turned to buying bread and other food from supermarkets. Due to the traffic bans, Romanians preferred to buy from large stores, which led to a decrease in sales in specialized stores. Bakeries with their own outlets have even recorded losses of over 50%. Lately, there has been an upward trend in sales from these bakeries, which makes me believe that it will slowly return to normal (if no more restrictions are imposed).
Consumer attitude and behavior
What do you consider to be the major changes in the consumer profile of bakery products with the onset of the pandemic?
AP: Both consumers and producers of bakery products have increased their demands in terms of production, packaging and sale. Everyone wanted to avoid coming into contact with infected products. Unfortunately, several county sanitary-veterinary departments exaggerated and ordered that all bread be sold prepackaged from the factory. This would have led to the closure of several thousand units that did not have the possibility of prepacking.
The economy after the coronavirus
What are the main aspects that bakery companies should focus on to mitigate the effects of the crisis in the short and long term?
AP: I believe that in this period entrepreneurs in the field should focus on the production and delivery of bakery products safe from a nutritional point of view. Also, the products should have a quality better and be MIXED, to be able to meet consumers.
How did other EU states manage the situation, so as to find and apply solutions to lessen the impact of the crisis?
AP: In Slovakia, the Czech Republic, Hungary and several European countries, the Ministry of Agriculture helped companies in the milling - bakery sector. The legislation applied in these countries was designed in such a way as to support producers in the face of pressure from hypermarkets. Here I am referring both to the price and to the terms of payment and contractual clauses.
What measures for accessing European Funds or state aid will be open for the milling-bakery sector in the immediate period ahead?
AP: Since the National Rural Development Program 2014-2020 is coming to an end, accessing European funds for the development and modernization of the sectors is no longer possible. However, we requested the MADR to allocate more budget from the savings made from the aid scheme for bakery products, through redistribution from other measures. This could make it possible to organize a new project submission session in the fall of this year (for the bakery sector). In addition, if the proposal with credits for the purchase of wheat were to be approved, it would be an excellent help for the milling sector. Regarding the professional training of the staff, it is not possible to access European funds in the next period.
In the new National Rural Development Program we will consider allocating the necessary amounts both for the milling sector through the primary processing measure and through a new aid scheme for the bakery and flour products sector. We still want to be able to modernize the existing units, but also to create new production spaces.
In all evil there is also good, says a Romanian proverb. Has this crisis also generated opportunities in the bakery market?
AP: I think that the only opportunity that this crisis has created is the appearance of a labor supply. Many Romanians who went abroad have returned to the country and some of them will go to the food industry.
