Interviews & Features
Atanas Urdzhanov: A Strategy Is Needed For The Meat Industry In Our Country
Atanas Urdzhanov is an economist by education. He has 30 years of experience in meat processing in one of the leading enterprises in the country. He is the first chairman of the Association of Meat Processors in Bulgaria elected for a third consecutive term. He is the Deputy Chairman of the Bureau of the Council of Branch Organizations at the Bulgarian Chamber of Commerce and Industry and the Deputy Chairman of the Management Board of the Food Industry Union.
The crises that have befallen us in the last few years have put the world economy to the test. And while today the focus is on the energy crisis, at the beginning of the epidemic, the prevention of the food crisis was a serious issue. And developed countries also experienced this to varying degrees. And we should be grateful to our industry that there were no empty store shelves in Bulgaria. With these reflections, and on the occasion of his re-election as chairman of the Association of Meat Processors, I met with Atanas Urdzhanov before the next online meeting of the Board of Directors. And given the unprecedented crisis in which our entire economy is operating, we began our conversation with a brief overview of the state of the sector at the moment:
About 20% of the production of food products in the country is the relative share of the Bulgarian meat industry. The Bulgarian enterprises themselves are modern, equipped with the latest technologies that meet all EU requirements and international quality and safety standards. About 70% of meat products are produced by the top 25 meat processing enterprises in Bulgaria. The main problem is the raw materials for the meat industry. According to official statistics, in 1989 there were 1,613,116 cattle in Bulgaria, in 2010 – 544 thousand cattle, and in 2019 – 510 thousand. There were 4,118,000 pigs in 1989, 664,000 in 2010, and 491,814 in 2019.
Despite the fact that the state continuously subsidizes animal breeding, there is not enough raw material for the meat industry. From a purely management point of view, for years there has been an underestimation of the strategic role of animal husbandry and the systemic links with many industries, which for too long have not been able to count on support. Transparent, systematic, long-term support from the state, in all its roles from legislative, through health, to customs and tax policy. We repeatedly put before the institution questions that there is no strategy for the meat industry. The latest state strategy is from the period 1999-2001, which sought solutions to the problems that arose in the period 1995-1998 - decline in meat production due to reduction in the number of animals, lack of financial resources, high indebtedness, loss of traditional markets, decrease in domestic consumption. Unfortunately 23 years later, the problems continue and the business risks are expanding and deepening. Among the problems, the challenge in preparing young personnel for the industry, as well as their long-term retention in it, should be pointed out. Аccording to data from the National Insurance Institute, the number of insured persons in the sector is 17,726 for the period January-July 2021, with 20% of those employed in the sector being over 55 years of age. The working conditions in the meat industry are at low temperatures (12 °C) and technological humidity. Young people do not want to work under such conditions. On the initiative of the AMB, the only two classes in vocational high schools in our country specializing in "Meat, meat products and fish production" (in Pleven and Sofia) were designated by the Ministry of Education and Culture as protected professions. The industry is developing very dynamically in terms of of new techniques and technologies and needs personnel with new knowledge, skills and competencies. I must also point out the fact that the connection between business and educational institutions is permanently broken. Over the years, the trend of divergence between the needs of the economy and the profile of the personnel who prepare secondary and higher education is deepening. There is room for improvement in many directions: when planning admissions to educational institutions, the current needs of the economy should be taken into account; to build a system that takes into account the realization of the graduating specialists. Considering changing demographic trends and an aging workforce, we in the industry work for continuity and transfer of knowledge and skills between generations, both from younger to older and vice versa. In order to meet the challenges in the sector, a new way of professional education and training is needed. It must be flexible and harmonized with the requirements of the labor market. A categorical fact about the efficiency of our food industry is that the Bulgarian consumer was satisfied with food products even at the peak of the crisis.
How do you assess the role of the state in supporting the development of the "Meat Processing" sector?
The safety requirements for foods of animal origin, such as meat and meat products, are significantly higher than those for non-animal foods. Depending on the risk assessment, meat processing enterprises are subject to official control by the competent authorities. And in slaughterhouses, control is constant, daily. All BABH-registered enterprises from the branch have made really significant investments in order to fulfill the high requirements of European and national legislation. But this control is only for registered, legal enterprises. Unfortunately, the "gray sector" is not controlled by anyone. In turn, the constantly changing legislation regarding food safety, animal welfare, etc. it requires that we continue to invest in improving the building stock, equipment, and the introduction of new technologies. Unfortunately, however, there is no support for the processing industry either from the state or from European programs (with one exception. Our industry faces a number of challenges for sustainable production of meat products. This necessitates the continuous introduction of new technologies and processes, optimization of production, with the aim of healthy nutrition, environmental protection, the adaptation of marketing and advertising strategies, taking into account the needs of the most vulnerable. To meet the challenges of a clean, circular economy, restoring biodiversity and reducing pollution, it will be necessary to invest more and more resources in innovation, technology and sustainable food. Industry representatives should be given opportunities to support and this is the place to mention that the principles and policies of the "Farm to Fork" strategy are an opportunity to improve lifestyles, health and the environment. Food packaging is also the subject of policies and sustainable solutions because it plays a key role in the sustainability of food systems. There is a tendency for the packaging of meat and meat products to increasingly use packaging suitable for recycling and protecting the environment. Your branch organization is among the most active in the industry.
Which activities would you note as the Association's aspiration to help companies and the state to improve the existing business climate in our country?
The fact that the Association of Meat Processors in Bulgaria is the only branch organization in its sector speaks volumes for the authority we have won over the past 28 years since its establishment. We work in many directions. On the one hand, we develop contacts between business and schools, supporting the adoption of study programs relevant to the needs of business, and on the other hand, we support the training of young personnel with practical models and internships. We help organizationally and technically. We develop the public's knowledge of the value of native meat processing. From the traditions in recipes and the taste achievements of Bulgarian production to the presentation of Bulgarian meat processors in various professional forums, in the media, in proposals to state institutions, where we often find understanding and sometimes support. Among our activities is the VAT policy of the state and finding proposals for its optimization, so that Bulgarian meat processors can be competitive on the European, but also on all other markets. 20% VAT makes Bulgarian meat products uncompetitive compared to European ones.
Out of 24 EU member states, only 5 countries do not have a reduced VAT rate for meat and these are: Bulgaria, Denmark, Lithuania, Latvia, Estonia -(we have no data for Malta, Luxembourg and Cyprus).The VAT rate has not been reduced in Slovakia on frozen meat and processed products, but on fresh meat it is 10%. In Ireland and Great Britain, VAT on meat and processed products is 0%. In Switzerland, with a standard VAT rate of 7.7%, the VAT on meat and processed products is 2.5%. VAT on meat and processed products in Hungary and Poland is 5%, in France 5.5%, in Belgium and Portugal – 6%, in Germany – 7%, in Romania and the Netherlands – 9%, in Slovenia – 9, 5%, in Spain, Italy and Austria - 10%, in Greece – 13%, in Montenegro – 7%, in Turkey – 8%, in Serbia – 10%.
With what specific activities do you support companies that are members of AMB and their specialists?
First of all, I will note that AMB is the only publisher of specialized literature in the field of the meat industry. Our 11 collections contain traditional Bulgarian recipes and technologies, manuals and guides. Our experts conduct trainings and develop self-control systems for food production and trade facilities (good practices, HACCP, traceability, sensory analysis, etc.). We carry out consulting activities in the field of food legislation (labelling, determination of nutritional values, designation of country of origin). We also conduct internal audits of food safety management systems in enterprises. We represent the Bulgarian meat processing industry in specialized exhibitions in the country and abroad with the aim of increasing its competitiveness and expanding the market positions of Bulgarian meat products. The last government tried to revive the idea of a Law on branch organizations, but there is a rather short time to implement this age-old idea.
How do you see the future of the activities of the branch organizations in the industry in the current situation?
We will continue to insist on a Law on branch organizations, in which, in addition to obligations, guarantees and rights should be spelled out, and government support. It is a practice for the administration to include branch organizations in various working groups and advisory councils, but in most cases their participation is only with an advisory voice and decisions about the business are taken by the administration. And the branch organizations are the ones who should have the right to participate in decision-making on legislation and strategies. For example, in Germany, no one has the right to start an activity related to meat processing without being a member of a professional trade organization. And because of the competition between them, manufacturers strive to comply with ethical norms and have greater respect from the branch organization.
What are the most important tasks for the Association of Meat Processors that lie ahead in your new mandate?
The food industry is a business sector of strategic importance for any economy. We explain this to all state leaders. Daily. Until we ensure the deserved institutional respect for the industry, for the meat processing companies in our country, for our employees and the respect for Bulgarian meat products, we will continue. This is my main task, but also of all of us. Businesses want a calm environment in which they not only try to maintain jobs, but also to develop. At the same time, it should develop not only in Bulgaria, but also regionally, with Bulgarian knowledge, experience, recipes and meat products becoming a traditional part of the table in other countries. Despite the challenges of today's unpredictable situation, we are actively looking for new perspectives for development. We will continue to actively participate in working groups and councils, we will send our knowledge and experience in the form of motivated opinions on problems related to the industry. The AMB will continue to emphasize the role and responsibility of the Bulgarian media for accurate information about Bulgarian meat products. Inaccurate, unclear media statements, even only in marginal media or in media with only local influence, can hinder the marketing of Bulgarian meat products not only on our, but also on European markets. We should not allow such a national underestimation of the high quality of Bulgarian meat processing in the media. The future of Bulgaria rests on the country's food industry and its competitiveness on a regional and global level.