Romania Becomes Sales Market for Multinational Companies

Romania represents a sales market of EUR 10 billion in foreign investments in trade, but only a few large international corporations, like Mars, Nestle, and Ferrero, have operations in Romania.

According to ZF, approximately 15 to 1 is the ratio of investments between retail and food, beverages and tobacco production. More precisely, for every EUR 3 invested in Romania by Kaufland, Lidl or Carrefour, which builds modern stores, dairy, juice or sweets producers, led by Coca-Cola, PepsiCo, Unilever, Lactalis or Danone, pay only EUR 0,20 for local factories.

How does this affect Romania? In a decade, Romania has EUR 10 billion of new investments in trade but only 600 million euros in the production of food and beverages. Thus, Romanian consumers buy “made in Poland” or “made in Hungary” goods rather than locally. Many giant multinationals such as Mars, Nestle, Colgate-Palmolive and L’Oreal do not have any factories in Romania, although they do in many neighbouring countries.

It’s easier just to sell on a market, not to bother to invest and have production. In the last 20-30 years, we have seen multinationals buying and then closing factories. It is clear that for these foreign groups, the Romanian industry is not of interest, they only want to create a market here.

Cristian Parvan, president of PIAROM.

Numerous local consumer products sector factories have closed during the past ten years. Still, no new investment totalling more than 50 million euros has been made in a production facility run by an international corporation. Furthermore, these organizations requested public assistance even when they made investments or planned to do so.

The state is generous with foreigners but caustic with its own. He gives them state aid but nothing to us. I did not receive any state aid or European funds. I reinvested the profit obtained.

Ioan Popa, founder of Transavia

As we reported, Romania’s trade deficit exceeds EUR 10 billion, a record sum, despite the efforts of the Romanian companies to market and sell their goods. Mihai Daraban, the president of the Chamber of Commerce and Industry of Romania (CCIR), highlights a significant problem in Romania, as the country is more of a market to the Western countries than a producer. He also emphasizes that Romania’s exports can not compete in volumes with the imports, which are much more expensive.

Will Romanians eventually learn to purchase more of their products and solicit their services? Incredibly, indigenous brands are difficult to find in a nation where the most prominent shops are all from the West.