With OECD support provided under the EU4Business initiative, Moldovan food producers will increase their capacity to work with international supermarket chains and access global markets.
The food processing sector plays a key role in Moldova’s economy, accounting for more than a third of production and a quarter of employment in the manufacturing sector. It also enjoys an expanding and nearby market for its products, the EU, which absorbs 70% of the country’s food exports, drawing on Moldova’s bountiful agricultural production.
Despite this partnership with the EU, which intensified with the signing of the Association Agreement in 2014, small producers often struggle to access EU markets due to limited competitiveness, concerns about food safety standards, limited managerial skills and a lack of export-support programmes. They also face hurdles at the domestic level, as small producers often struggle to meet the requirements necessary to supply the burgeoning supermarket sector.
“At the moment we produce 400kg of chocolate-covered fruit every day. But we use only 20% of our capacities and we would like to find more reliable partners and explore new markets", says Elena Vutcariov, Owner and CEO of Fruvit.
“We wish to see more Moldovan products on our shelves. To perform well, our partners should pay attention to three important aspects: product quality, supply continuity, and promotion techniques, which we use at Metro", admits Sergiu Botnaru, Head of Fresh Products, Metro Cash and Carry, Moldova.
With EU4Business support, the OECD launched a project to support Moldovan food producers in their efforts to reach international markets and foster linkages between small and medium food producers and the growing food retail sector. The project seeks to help identify gaps and build the necessary capacities to meet the sector’s evolving demand. Working in close partnership with the government and involving the active participation of food producers and retailers, the OECD prepared a set of recommendations to facilitate supply chain linkages between local food processors and supermarkets and leverage these links to prepare local food processors for integration into EU and broader global value chains. These key recommendations are contained in the report "Supporting Exports and Supply-Chain Linkages in the Food Industry in the Republic of Moldova".
Impact of EU4Business support already visible
Following the action plan developed by the OECD, Moldova’s Organisation for Small and Medium Enterprises Sector Development (ODIMM) is already working on the implementation of a Linkages Development Programme, with the aim of increasing the number of SMEs selling to retailers and of raising the amount of sales of Moldovan processed food products.
“Our objective is to facilitate cooperation between SMEs from the agrifood sector with large companies and promote these companies in foreign markets. We believe that with the OECD and EU4Business support we will manage to achieve the expected results”, says Iulia Costin, Director General, Moldova’s Organisation for Small and Medium Enterprises Sector Development (ODIMM).
The Programme will consist of six stages and participation in the Programme will endow producers with the necessary skills to engage with and integrate in GVCs; and facilitate interaction between potential business partners, with the aim of building linkages between SMEs and retailers.
Watch video on YouTube about OECD-EU4Business support of this project