The Polish confectionery sector is showing signs of growth, according to an article that appeared in Poland's Rzeczpospolita newspaper. Candy and biscuit sales rose to 145,000 tonnes last year, up from 138,800 tonnes in 2001, and are expected to rise further this year.
This comes against a background of overall economic slowdown in the country. The paper argues that growth in the confectionery market is currently being driven by exports to countries such as Japan or China, and a wave of consolidation is expected to take place once Poland joins the EU next year.
Confectionery production costs are significantly lower in Poland than in the EU. According to professor Roman Urban at the Farming Economics and Food Management Institute (IERiGZ), prices of Polish confectionery products should remain competitive even after Poland joins the community next year. "Even the inevitable rise in sugar prices should not change that, because sugar has a relatively low share in overall costs," he said. According to Marek Przezdziak, chief of Polbisco, an association of 31 chocolate makers controlling 80 per cent of the market, the main threat to the industry is Poland's high VAT rate of 22 per cent on confectionery products. This, he says, threatens to favour foreign producers once import barriers are lifted.
Many of the world's leading confectionery manufacturers such as Nestle (which owns Goplana), Kraft Foods (Olza, Jawornik), Cadbury, Danone and Ferrero have factories in Poland. Nestle was the largest confectionery producer in Poland last year, with sales of ZL1.35bn and net income of ZL55m. Kraft had sales of ZL739m, and Danone of ZL250m.
Despite the influx of foreign companies, domestic manufacturers remain important players in the market. Kaliszanka, which had sales of ZL136m last year, is the third largest player in the biscuit segment, Jutrzenka is fifth largest, and other significant players in the segment include Tago and Delic-Pol.
Large domestic chocolate manufacturers include Solidarnosc, Wawel, Terrawita, and Milano.
Companies associated in Polbisco had sales of ZL4bn in 2002, of which 30 per cent, or some ZL1.2bn, was export. Przezdziak believes that upper single-digit export growth should continue this year.