Distribution companies report business declines up to 100pct, seek gov't support

Romanian distribution companies are asking the government for support as the turnover in the sector decreased between 20% and 100% after the closure of the HoReCa system, the main trade channel for these companies, according to executives of the Association of Romanian Distribution Companies (ACDBR).

"The Association of Romanian Distribution Companies has signaled since the beginning of April the difficulties faced by distributors of consumer goods generated primarily by the closure of the HoReCa system (...). When the restaurants closed, the figures for distributors' business decreased between 20% and 100% from the similar period of the previous year," according to ACDBR Chairman Ovidiu Gheorghe.

Following the passage of Government Emergency Ordinance 130/2020 regarding of financial support from non-reimbursable external funds, ACDBR asked Prime Minister Ludovic Orban for a consultation meeting, and the two chairs of Parliament for amending the ordinance in the legislative process.

"The European Commission adopted on March 19, 2020 the Communication 'Temporary Framework to support the economy in the context of the coronavirus outbreak,' setting out the possibilities available to member states under European Union rules to ensure liquidity and access to finance of companies facing difficulties as a result of the current COVID-19 epidemic, while maintaining the integrity of the EU's internal market, ensuring a level playing field."

Distributors claim that the low level of professional competence in some ministries (agriculture, economy, European funds) and the disregard of the conclusions of the dialogue with professional and employers' associations have gutted of substance the ordinance on measures of financial support from non-reimbursable external funds.

"Expected since April by the Romanian business community, this government ordinance establishes grants for working capital and investment for certain economic sectors without prior economic substantiation, without taking into account the economic reality generated by the COVID-19 epidemic, while the selection criteria of financing for investment projects are unaffordable for many SMEs in terms of their chances of obtaining the necessary score to receive funding. The main CAEN codes specific to the distribution of consumer goods are not included in the annexes of Ordinance 130 / 2020, although from discussions and official correspondence with representatives of national and European public authorities, these CAEN codes are not disqualified from getting funding in the shape of European funds: 4617 - Agents involved in the sale of food, beverages and tobacco, 4634 - Retail sale of beverages, 4639 - Non-specialised wholesale of fruit, drinks and tobacco," according to Gheorghe.

ACDBR represents a total turnover of about 1.36 billion euros, 100% national capital, 35% of the total traditional distribution of goods market, about 11,000 employees and over 75,000 customers ensuring the "traditional distribution" of consumer goods in Romania in the HORECA system and in the market of convenience stores / independent retailers.