Moldova could face pork production crisis

17-04-2012 | | |

The prices for poultry and pork in Moldova in the next few months will rise about 12% due to the increase of value-added tax – from 8% to 20%.

Local producers say that they could not raise the price for meat because in this case people will simply stop buying. According to some pork producers in Moldova the figure of 12%  is too cautious, and in reality, the price for poultry and pork production could rise by 18% – 20%.

Currently a kilogram of poultry meat in the country is sold at 32-34 lei (US$ 2.72-2.89), and experts predict that as a result of the introduction of the new VAT price, it will automatically increase to 39-41 lei (US$ 3.31-3.48) per kg. The price for pork will increase from 38-40 leis (US$ 3.23-3.40) to 45-48 leis (US 3.82-4.07). However, the increasing of prices for poultry and pork will also result in local producers being unable to compete with imported meat, which is initially less expensive, and is also subject to 20% VAT. They fear that many consumers after the increase of prices will abandon meat products in their diets so poultry and pork production will become unprofitable.

“We all soon will have to close our operations, lay off 30,000 employers in the poultry sector, and another 20 thousand in the pork sector, and we will eat meat from Argentina and Brazil,” said Nicholas Kovash chairman of the association of poultry producers.

(By Vladislav Vorotnikov)