Over 50 milk factories, about one third of the production facilities on the Romanian market were closed last year due to lower domestic demand and rising production costs according to Dorin Cojocaru, president of APRIL, Romania’s Dairy Industry Association, who talked to Mediafax.
Of 183 production units in operation at the beginning of 2014, only 130 are still operational, indicates the newswire.
The situation is explained by Cojocaru who says that besides the production costs which are higher every year, the hypermarkets have turned to import milk instead of local dairy products as the products traded under their own brands are produced in Austria, Germany, Hungary, Poland or Slovakia.
“These countries provide cheaper milk as a result of the embargo imposed by Russia which left them with large stocks of milk”, said the APRIL’s president, also pointing out that hypermarkets have increased slotting fees for Romanian milk providers as a mechanism for supporting the companies they cooperate with in the countries they originate in.
The outlook for this year is not encouraging either, Dorin Cojocaru anticipating that by the end of 2015, only 70 production facilities will remain operational after the European Union milk quota abolition will come into force on April 1, 2015 as thenceforth every Member State will have no restriction on domestic milk production.
According to APRIL, the Romanian dairy products market comes to nearly 900 million euro.