Meat to Romania

(Last updated: 17 Jul 2007)

Trends and opportunities

The market

The Romanian meat processing industry is facing a major deficit in meat supplies due to a shortage of domestic supply and banned imports as a consequence of BSE and foot-and-mouth disease. The Romanian Meat Importers Association is searching for new, reliable, long-term sources of supply for meat (beef, in particular) to compensate for the problems with the domestic market and the constraints on importing from traditional sources.

As with much of the Romanian economy, much change is being driven by accession to the European Union (EU). Romania’s meat processing industry is turning to the production of product suitable for the EU market. Domestic meat is expensive and of low-quality – unsuitable for meeting the EU market demand for high quality finished products. The industry supplements its meat supply with cheaper, higher-quality imported product.

The Romanian meat processing industry has the processing capacity, skilled labour and low labour costs to successfully compete in the EU market, although antiquated production technology will constrain growth. However, the domestic supply of meat will continue to be problematic and it is unlikely to fulfil the meat processing demand in the short to medium term.

Post-1990, Romania citizens gained private ownership of land that was formerly collective-owned. The distribution resulted in the overwhelming majority of the 2.8 million private Romanian farmers (86 per cent) owning less than five hectares of land. The average size of a privately owned farm is 2.2 hectares. In common with some other new entrants to the EU, Romania is composed of market-orientated and subsistence agriculture. The combination of factors will cause Romania significant challenges as it integrates into the EU market.

Market conditions do provide opportunity for Australian suppliers of meat product. Domestic meat consumption is increasing following a period of significant reduction through the 1990s (54 kilograms per capita annually in 1996 down to 35 kilograms in 2000) when consumer purchasing power diminishing as the economy contracted. Since 2000, the economy has grown at an (above) average rate of over five per cent a year and this is expected to continue.

Romania has a substantial population base (even allowing for subsistence production) that can support business development. Australia is an approved supplier in relation to BSE and foot-and-mouth issues. While constraints remain on meat trade throughout Europe, the Romanian market provides an opportunity for Australian suppliers to create a position in the lucrative EU market especially as Romania builds it domestic herds. 

Opportunities

The major opportunities for Australian exports in the Romanian meat industry include:

• Live animals, especially cattle, for livestock rebuilding
• Live breeding animals for genetics improvement
• Manufacturing beef and sheep meat
• Lamb meat
• Offal
• Tripe

Competitive environment

Brazil, and neighbouring Hungary and Moldavia, are key suppliers of meat to Romania. 

Tariffs, regulations and customs

The Government of Romania, Ministry of Economy and Trade is responsible for setting custom tariffs for agricultural products including meat and meat specialities. Products originating from different countries and trading blocs are subject to different tariff and tariff quota regimes.

Romania has received export tariff quota exemptions from the European Union (EU), making quantities of a range of meat and meat products exempt from custom duties when entering EU countries.

A 19 per cent value added tax and 0.5 per cent custom commission – calculated on the cost, insurance and freight (CIF) value­ – are levied on imported products.

Austrade can assist Australian suppliers in determining the relevant customs duties that apply to specific products. 

Industry standards

Imports are subject to local quarantine regulations. Source slaughterhouses must be EU approved. With accession to the EU, Romanian agricultural and food processing standards, procedures, rules and regulations must comply with EU requirements.

Marketing your products and services

Market entry

Manufacturing meat is imported into Romania directly by manufacturers (eg. Scandia) and by specialist importers.

About 80 per cent of the meat imported into Romania goes into the processing plants for canning and manufacturing meat products such as salami and sausages. The remaining 20 per cent goes into the wholesale and retail system.

The wholesale market is dominated by Metro Cash & Carry, which has a 65 per cent share of the market. Billa has a 15 per cent market share and Carrefour has 10 per cent. These companies do not import directly but via other specialised import companies, such as Atalanta International, Agroalim Group, and Macromex. These specialised importers also act on behalf of the supermarket chains such as La Fourmi, Mega Image, Gima, and Nik's.

Some retailers import product directly.

In-market visits and direct contacts with retailers, manufacturers and importers are highly recommended to build confidence and long-term relations.

Distribution channels

Commodities and intermediate products are often purchased directly by the processing plants or by importers that sell to small and medium plants. Large supermarkets purchase from importers, but also directly import some items.

General foodstuffs importers or more specialised distributors operate in Romania.

For most Australian suppliers, an agent or distributor would be the most effective method to access the market. 

Transport

Romania is in the process of upgrading its transport infrastructure. The country is serviced by rail, sea and air connecting all the population and commercial centres and linking to neighbouring countries.

Romania’s capital, Bucharest is serviced by two international airports – the larger, Henri Coanda International Airport (formerly Bucharest Otopeni International Airport) and Bucharest Aurel Vlaicu Airport (former Baneasa Airport).

TAROM, the flag carrier airline of Romania, provides passenger and air cargo services using Henri Coanda International Airport as its main operating base.

Constanta is the largest seaport on the Black Sea. Constanta is linked to Bucharest by rail and freeway and is serviced by its own airport. A large canal connects the Black Sea, at Constanta, to the Danube River.

The Romanian road network is extensive but inadequate for the volume of traffic that uses it. Rail is the main form of freight transportation. 

Links and industry contacts

Meat–related resources

The National Consulting Agency in Agriculture
Bucharest, Romania
Tel: (4021) 312 4620

Fax: (4021) 312 4627

The Romanian Bioagricultural Professional Association
Cluj-Napoca, Romania
Tel: (40264) 266 606
Fax: (40264) 266 709

The Association of Ovine Breeders – Dobrogea
Constanta, Romania

Tel: (40241) 617 899, 545 574
Fax: (40241) 618962

The Association of Karakul Ovine Breeders ­

Botoani, Romania
Tel: (40231) 514673, 517525
Fax: (40231) 517525

Romanian Farmers Association
Bucharest, Romania
Tel: (4021) 312 5947
Fax: (4021) 312 5947

The General Association of Fowl Breeders
Bucharest, Romania
Tel: (4021) 312 6795
Fax: (4021) 310 2277

The General Association of Taurine Breeders of Romania
Bucharest, Romania
Tel: (4021) 323 4262
Fax: (4021) 323 3324

Government, business and trade resources for Romania

Ministry for Foreign Affairs and Trade – www.mae.ro
Romanian Chamber of Commerce and Industry ­– www.ccir.ro

Contact details

The Australian Trade Commission (Austrade) is the Australian Government’s trade and investment development agency, operating as a statutory agency within the Foreign Affairs and Trade portfolio.

Austrade assists Australian businesses contribute to national prosperity by succeeding in trade and investment, internationally, and promoting and supporting productive foreign investment into Australia.

Austrade:

• Delivers services that assist Australian businesses initiate, sustain and grow trade and outward investment.
• Promotes Australia as an inward investment destination and, with the States and Territories, supports the inflow of productive foreign direct investment.
• Administers the Export Market Development Grants scheme.
• Undertakes initiatives designed to improve community awareness of, and commitment to, international trade and investment.
• Provides advice to the Australian Government on its trade and investment development activities.
• Delivers consular, passport and other government services in designated overseas locations.

A list of Austrade offices (in alphabetical order of country) is available.

More information

For further information please contact Austrade on 13 28 78 or email info@austrade.gov.au

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