The members of the Romanian-German Chamber of Commerce and Industry (AHK Romania) from the agricultural and retail sectors declare themselves very concerned and disapprove of the latest proposal of the Ministry of Agriculture regarding the draft emergency ordinance providing for the capping of the markup to agricultural and food products.

In an open letter sent to the Government of Romania, published on Friday, they show that the measure to cap the markup to agri-food products, as well as to fertilizers, feed and pesticides, threatens the entire agri-food value chain. At the same time, this measure is likely to contravene the Romanian Constitution, which guarantees a free market economy, and represents a potential violation of the regulations and general laws for conducting business in the EU.

The German business community draws attention to the fact that the current provisions will lead to the multiplication of weaknesses in the value chain which, in the end, will also be borne by the Romanian consumer. Among such potential weaknesses are: the blocking of the supply chain, the deterioration of the Romanian investment climate, the intervention in the price structure and taxation.

Moreover, such a measure will contribute to the aggravation of food waste, in terms of the quantities of products ordered forcibly, without there being a sufficient demand from the buyers.

German businessmen are particularly worried about the Government’s intention to intervene in the price structure, which is essentially a matter of trade policy, which should be determined individually by businesses. Pricing strategies are developed based on several factors, including market demand, production costs, and competition dynamics.

Since the economic operators active in the food industry are among the largest contributors to the state budget of Romania, affecting the efficiency and profitability of these companies will have a direct impact not only on the labour market and investments, but also on tax collection.

The minister of agriculture, Florin Barbu, last week told a press conference that all products processed in Romania will benefit from the capping of the markup, a draft ordinance to this effect following to be launched for debate in the coming period.

The measure provoked contradictory reactions, being challenged by the Romalimenta Federation and the Association of Large Retail Networks in Romania (AMRCR) and supported by the Association of Organic Farming Operators – BIO Romania.

In this context, on Thursday, the minister of agriculture announced that a new discussion with representatives of the food industry regarding the capping of the markup to all products processed in Romania will take place next week. He stated that he wants to have „a fair dialogue” both with the processors and with the retail area representatives in Romania.

He claims that this decision to cap the markup will not affect the businesses of processors and retailers in Romania.

AGERPRES