Nestle Romania: Other markets to be affected, before food sector

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Nestle Romania believes the current market unpredictability should be viewed cautiously and if the purchasing power was to begin on a downward trend, the food sector would be among the last to be affected, the Ziarul financiar writes on September 22, citing the company’s head Nuber as saying.
 
Domestic turnover earned by Nestle, the largest food producer worldwide, could amount to almost 200 million euros this year.
And although this year is expected to be a very good one, scoring over 25% sales increase (in RON) against 2007, Nuber is reserved about the market dynamics during the last few months.
 
“It would be a mistake for us to be euphoric. The economic growth in the first half is indeed significant, but the market needs to be analysed in terms of sectors. The economy is very unstable this year, as well, which makes it difficult to predict what will happen from now until the yearend,” explains Nuber, adding that the Company’s big challenge this year has been the depreciation of the Romanian currency against the euro, which has been mainly felt in the rise of raw material costs.
 
The 30% sales advance forecast by the Company for this year is similar to the growth rate in 2007 against that of the previous year.
Last year, Nestle Romania’s turnover amounted to 150 million euros, driven forward by the rise in consumption.
“It is obvious that the purchasing power will rise in absolute terms this year, as well. The big change on the market in 2008 comes in terms of how consumers choose to spend their money, because of high fuel costs, the rise in interest rates and the appreciation of the euro against the Romanian currency are felt in every individual’s budget,” the same daily reads on citing Nuber as saying.
 
Nestle Romania official believes the food sector, especially the average segment the Company targets, will be among the last markets affected by the decline in purchasing power. “Consumers will most likely first give up the acquisition of electronics and home appliances or will cut back on other categories of expenses, such as mobile phone expenses,” the Ziarul financiar concluded by quoting Nestle’s manager as saying.
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