The VAT rate increase did not affect the sausage industry, yet the setback rather hit the HoReCa business, where cold meats are used as a raw material, Radu Timis Jr., CEO of cold meats producer Cris-Tim told a press conference on Friday.
"We see that in August, consumption in Romania took a dip overall in the area of consumer goods. However, in our industry, we haven't yet seen a decrease in consumption in August. What is happening is most certainly this: consumption in the HoReCa segment has taken to a much steeper decline than retail. The HoReCa business is more impacted. It may be even more so next year if it no longer benefits from the same VAT rate as retail products. If the VAT for HoReCa increases to 21%, the effect will definitely be much greater. HoReCa is a sales channel for our products they use for making finished products. Only there is a certain decline noticeable, but the HoReCa accounts for an extremely small share within our group. It is a channel we want to invest in a lot in the coming years. Romanian retail is still over 40% traditional retail," said Radu Timis.
He mentioned that in Romania there are over 70,000 traditional retail stores, small boutiques owned by entrepreneurs. The company serves over 15,000 customers, small stores every week.
"Looking at the figures for July, August, and September, there is a 0.5% decrease in volume. Indeed, the drop is more significant in August. In September it is even -0.5%. We are talking about year-on-year figures. There is no reason to worry for now, as in the first half of the year there was an increase of 1.9%. So we do not see any effects at the moment, at least in our industry," said Razvan Furtuna, CFO at Cris-Tim Family Holding.
The company organized a press briefing on Friday for the conduct, between October 17 and 29, of the IPO for the company's listing on the Bucharest Stock Exchange.
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