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Belgrade, 16/10/2014

Serbian Consumers Annually Spend Over 420 Million EU due to Unreformed Trade Regulation

Business Support Network compared the trade regulations and bureaucratic procedures in Serbia and 6 EU countries. The research showed that the same products in Serbia are 18.5% more expensive on average, as retailers have to calculate a number of imposed expenses in the final price.

The research covered the formation of prices in 12 different product groups in retail chains in Serbia and six EU countries (Slovakia, Czech Republic, Poland, Hungary, Romania, Austria). Basic foodstuffs were covered, but also clothing and consumer goods (dairy products, bulk meat, meat products, doughs, non-alcoholic beverages, female and male clothing, clothing for children, adult footwear, TVs, computer equipment and devices)

According to the purchasing power, Serbia is one of the 4 poorest European countries. Still, the years of delay in the reform of trade legislation forces the traders to calculate numerous bureaucratic obligations and expenses in their profit margins and the retail prices of their goods. In that way, by purchasing 12 listed product groups, Serbian consumers annually spend 420 million EUR more than the consumers in Slovakia, Czech Republic or Austria.

Average number of business expenses for the traders selling bulk meat and meat products in Serbia is twice as high when compared to the 6 listed EU countries (8 in Serbia, 4 in EU countries). The same situation is with the retailers selling TVs and computer equipment (6 in Serbia, 3 in EU).

For example, during food sampling and surface sampling procedures, when the samples prove to be clean, Serbia does not return the funds spent for the sampling procedures, causing an annual expense of over 6 million EUR for the traders, which is calculated in the product cost. In other countries, the funds are returned to the trader within 15 days, with interest rate charger for every day past the deadline.

Also, obligatory measurement of lighting factor on every 50 m2 and periodical microclimate controls do not cause expenses in the EU countries, while in Serbia these procedures cost over 1.5 million EUR per year.

Special problem are different attests and certificates, since the verification procedures of European and international standards for basic foodstuffs and technical goods in Serbia is extremely expensive, the contingents are stopped at customs, storage is paid for the duration of the procedure, which can sometimes last for weeks, even months. This bureaucratic procedure poses a significant cost to the traders, and consequentially, each product imported into Serbia has to be more expensive than in the country of origin.

Serbia is the country with the most business-unfriendly foreign trade regulation in the region, since Macedonia, Montenegro and Bosnia and Hertzegovina have all significantly reformed their regulation in this area, while Serbia has not only kept its old regulations, but has simultaneously introduced a number of new regulations after 2001.

If the Ministry of trade, tourism and telecommunications were to reform the trade regulations and import procedures, it would create space for reduction of retail prices, and the purchasing power of Serbian citizens would significantly increase. This would benefit low-income citizens, while also increasing the turnover in trade.

Currently, the consumers in Serbia are the victims of bureaucracy, and pay for the number of unnecessary procedures and operational expenses, which the traders are forced to calculate in their retail prices.