Boston, MA -- (SBWIRE) -- 04/15/2014 -- Although we forecast Romanian real GDP growth to slow modestly to 2.8% in 2014, from an estimated 3.3% increase in 2013, we believe the economy is rebalancing towards a more stable and sustainable structure. While the economic growth has been largely driven by the country's robust exports, strengthening private consumption, supported by low inflation and favourable credit conditions, is expected to provide an important additional boost for the economy. This sets a firm foundation for moderate growth for Romania's food and drink sector over the coming years.

Headline Industry Data (local currency)

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- Food consumption growth year-on-year (y-o-y) in 2014: +5.1%; compound annual growth rate (CAGR) to 2018: +5.4%.
- Per capita food consumption growth (y-o-y) in 2013: +5.3%; CAGR to 2018: +5.7%.
- Alcoholic drinks value sales growth (y-o-y) in 2014: +3.7%; CAGR to 2018: +2.5%.
- Soft drinks value sales growth (y-o-y) in 2014: +10.3%; CAGR to 2018: +6.8%.
- Total mass grocery retail sales growth (y-o-y) in 2014: +7.6%; CAGR to 2018: +6.9%.

Key Industry Trends And Developments

Coca-Cola Opens New Bottling Line For Juice Brand: In November 2013, The Coca-Cola Company opened a new bottling line for its Cappy Pulpy orange juice brand at its production facility in Ploiesti, Romania. The company invested EUR22mn (US$30mn) in the new bottling line, which has a production capacity of around 36,000 bottles per hour. The move aims to expand the availability of the Cappy Pulpy beverage throughout the Eastern and Central European region.

Romanian Regulators Approve Auchan's Purchase Of Metro Hypermarkets: In August 2013, regulatory authorities in Romania have approved the sale of 20 hypermarket premises in the country owned by Germany-based retailer Metro. The stores will be acquired by French grocery retailer Auchan in a deal that will make it the second largest retailer in Romania. Competition authorities have been reviewing the proposal since its first announcement in November 2012. The stores in question will be those owned by Metro's Real hypermarket brand.

VAT Cuts To Bread: Value-added tax rate for bread was cut from 24.0% to 9.0% starting September 1 2013. The tax reduction will have a positive effect on bread production and sales, as it will reduce the shelf prices for the bread products. While we forecast the bread sales to expand by a compound annual growth rate of 2.0% to 2018, the figure is likely to be revised upwards over the coming quarters.

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