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Slovakia Food & Drink Report Provides Independent Forecasts and Competitive Intelligence on Slovakia's Food & Drink Industry

Posted on: Monday, 25 June 2007, 06:06 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c60625) has announced the addition of "Slovakia Food & Drink Report Q4 2006" to their offering.

More mass grocery retailer (MGR) players are heading for the exit in Slovakia. Dutch giant Ahold is to dispose of its Hypernova chain in the wake of its corporate restructuring and recovery plan, which was unveiled in November 2006. Potential buyers will look at Tescos ongoing odyssey in trying to obtain competition clearance for its acquisition of Carrefours hypermarkets in the country, a deal originally announced more than a year ago. A decision is now due in January 2007 and the agencys findings will have a potentially big impact on future deals. In the agencys defence, Slovakias MGR sector is consolidating rapidly, reflecting a small marketplace and limited multinational interest.

Still, German hard-discount player Aldi will enter the market, with plans to open the first outlets in late 2008 or early 2009. Simultaneously, the company is building a distribution centre due to open by 2010. As noted in the CEE (Central and Eastern Europe) Discounting survey, new this quarter, Aldis entry is an opportunity to shake-up a consolidating market and take advantage of growing opportunities in regional markets. Aldi will compete with traditional rival Lidl, present since 2004, and pose a new threat to the local co-operative giant Coop Jednota Slovensko. Competition authorities may take note of the discount threat as they examine a future Ahold sale.

Consolidation is even more pronounced in the brewing sector, with SABMiller and Heineken controlling upward of 80% of the beer market. Other food and beverage sectors are also under the sway of a few large foreign players, prompting fiery rhetoric but, thus far, relatively little action from the populist, centre-left government of Prime Minister Robert Fico, which came into office over the summer with a mandate to help the countrys beleaguered farmers and smaller food processors. For the moment, the government has surprised pessimists with its reasonable 2007 budget and commitment to meet the Maastricht criteria for Eurozone entry in 2009. The economy continues to perform strongly, with GDP growth forecast at 6.6% for FY06 and a 9.8% spike in Q306.

By any measure, however, Slovakia offers limited opportunities for most food and beverage players not already present in the market. The MGR sector will continue to grow, but relatively modestly in comparison to other CEE markets, at a compound annual growth rate of 4.2% between 2005 and 2010, compared to 10-20% in other CEE markets and 28% in Russia. The outlook is also uncertain. The government has kept its powder dry for the most part but sits on a number of regulatory initiatives, including steps to set minimum buying prices for food products -- to protect farmers and small processors -- as well as concentrate food regulation in a super ministry covering agriculture and other aspects of the industry.

Companies Mentioned:

-- Coop Jednota Slovensko sd

-- Tesco Stores SR

-- Schwarz Group

-- Tauris as

-- Heineken Slovensko as

-- Solivary

For more information, visit http://www.researchandmarkets.com/reports/c60625.

Source: Business Wire

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