The food industry is successful in Bulgaria, and for good reasons : with a very mild climate and a minimum wage of 100 euros, the country is obviously a paradisiac place for foreign investors. Following the establishment of a number of foreign retail chains, Bulgaria has now become the hidden pantry of Europe.
Great brand names for great advances
Indeed, the Bulgarian food industry currently employs nearly 100,000 workers for about 7 million inhabitants, and alone represents 24% of the GDP. It is thanks to the entry of foreign distribution giants that the country could develop increasingly on the market, following the implementation of worldwide famous brands such as Metro Cash & Carry, Lidl, Kaufland, Penny (Germany) , Carrefour (France) Billa (Austria / Germany), T -Market (Lithuania , Piccadilly, Tempo (Serbia ) and Mercator (Slovenia). Since its accession in 2007 to the European Union, Bulgaria had to adapt to the European standards and thereby modernize its industry, which has only been possible thanks to foreign investors. Bulgaria therefore enjoys a rich agri-food industry, although it has not always been the case. Indeed, until 1989 the country was subjected to severe restrictions regarding agricultural exports , which is no more the case since these exchanges are now regulated by a number of multilateral and bilateral agreements. In addition, since 2008 there was an increase of 50 % of the exchanges in terms of agricultural equipment, confirming indeed a recovery of this sector.
Following the development of the food industry, many opportunities are emerging and new consumption patterns arise: due to the establishment of a large number of chains of food stores, the demand also exploded and supermarkets continued to spread throughout the country. Therefore, the production of food goods has increased tenfold. On an other hand, the food in Bulgaria is 40% cheaper than the average price in Europe, thus bulgarian products are good candidates to be exported, especially dairy products, meat, and alcoholic drinks. Another direct effect is an increase in the production of industrial machinery to ensure production and meet the growing demand. Bulgaria has always been a country based on heavy industry (one third of the inhabitants work in the industry sector) therefore an increase of trade in terms of industrial machinery was noticed. However, small problem: from a financial point of view is Bulgaria in a delicate position as the country became increasingly dependent on foreign investments, hence, its openness to international trade could weaken its economy in the case that investors would decide to leave.
Bulgaria certainly suffers from the national debt following the crisis that hit the european industry, however, the funds being injected into the industry could help the country recover. This requires that Bulgaria both focuses on the most promising sectors of its economy and on a financial independence on a long term basis. To read more about Bulgaria’s industry, check our article about the textile sector.