The View from Switzerland

Ansgar Bornemann, Regional Director, Nestlé Adriatic Nestle, a major food producer and marketer in Serbia, views positive elements in the performance of the government, the coming negations for EU accession and future emergence from the economic crisis. The View from Switzerland How do you find Serbian legislation for business? Which key laws do you think should be amended to make doing business here easier and better? It is very important for us that current laws are being observed and that gradual harmonization with EU legislation is being implemented. For any business, knowing the rules is a precondition for a stable and growing business. However, we can see that companies in Serbia face regulatory obstacles and some bureaucratic procedures, for example the period of time required to gain necessary export-import licenses. Simplifying these processes, reducing waiting time and harmonizing regulations, e.g. regarding product labelling, with EU regulation, would make doing business in Serbia easier and more efficient. Is the Serbian Labor Law stimulating for companies? The new labor act that has been announced appears to be more stimulating for companies regarding employment of experienced cadre, since there will be some changes that imply a lighter burden for the employer. The current law is more oriented towards protecting workers, and in times of crisis, it’s understandable that this is a tool for retaining employment rates. On the other hand, it does not give an employer the flexibility to adapt to market conditions and can sometimes reflect negatively on a company’s business. However, Nestlé has developed a business strategy that allows us to grow and expand in times of crisis, so we did not experience restructuring and a big fluctuations in the number of employees, and the candidates that will lead our company forward are recognized and appreciated. What changes will Serbia’s accession to the EU bring? Will it make business conditions easier or harder for your company? Being a company from Switzerland, we are accustomed to business rules and customs prevalent in the EU. Serbia is on the way of receiving a final date for negotiations, which means that it will more intensively work on legislation harmonization. Applying the same rules means simplification of processes, such as import, export, obtaining licenses, etc. It also opens new exporting possibilities, product placement in the EU market and opportunity for products from Serbia to enter competition under the same conditions as other countries. Therefore, we see accession as an opportunity and a process that will make our business more efficient and stable. What do you expect from 2013 in the context of the economy? Will it mark the beginning of recovery or will doing business remain hindered, and why? According to predictions of the World Bank and the EU Commission, the economy will shrink more than estimated at the beginning of the year, and a high unemployment rate will continue pressure on recovery through the Euro zone. However, this year will not be as volatile as in the previous period, which is important for business in terms of planning. Predictions are that 2014 will be the year when we will finally see gradual recovery in the EU zone. Although predictions are not encouraging, we are optimistic that we will soon see the end of the recession that has hit hard in the Euro zone. What is the situation in the Serbian food market? The food culture in Serbia, and the Adriatic region altogether, is much emphasized, and it plays a very important role in the everyday life of people here. The rest of Europe does not have such an emotional approach to food, and this is actually an important driving force of growth for Nestlé, as part of the food industry. This motivates us to listen carefully to the needs and wishes of our consumers, and we do develop specific portfolios for different communities. Therefore, MAGGI soup in Bulgaria is not the same as MAGGI soups that are sold in Serbia. It has been adapted for local taste and habits, and being such an important part of their lives, this is even more stimulating task for us. In Western Europe, on the other hand, the trends of eating healthier and being concerned with nutrients are more and more present. Industry has been hit hard by the crisis - how do you deal with this? As I mentioned, we have developed a business strategy to deal with crisis. The pillar of our growth platform remains, our innovation and renovation of our products, which keeps our consumers interested in a very competitive market. Besides lowering prices, we have to offer our consumers something new and exciting, an added value that will keep them fateful to our brands. A good example is the change we made to CIPIRIPI, which is one of our gluten-free products. A redesigned package, richer taste and improved quality of the product will attract new consumers and keep old ones. With this innovation, CIPIRIPI has already achieved sales growth of more than 30 per cent compared to the same period last year. Promotions, price reductions, and other point of sales activities are how we response to the crisis, but that only, without constantly enriching our product portfolio, is not sufficient to keep consumers and grow. Are you satisfied with the way the state here treats food producers? We have good relations with government representatives, and cooperation with the Ministries is on a good level. For us, it is very important that regulation related to fairness is observed, and that same business principles apply to all. As a big food producer in Serbia, we also have responsibility to, together with other business community representatives, identify common problems and propose solutions in order to improve business conditions. As Nestlé has a long tradition of conducting business in the EU market, we are more than willing to share our experiences, especially now, when Serbia is moving fast towards the EU and when the same business rules and principles are to be implemented. Interfile: How do you think the government has performed in the past year? Probably the most important indicator of government performance was that Serbia will finally open EU accession negotiations at the beginning of 2014. Serbia gained the long-expected green light after much hardship and conflicting information, and, more importantly, without additional conditions. This means that the current government is recognized by the EU as one that will follow the road to EU accession and more importantly, has the potential to deal with some very sensitive issues that have been an obstacle to accession negotiations in the previous period. These positive signals, and support given, will hopefully give Serbia new strength and motivation to continue with reforms that will be beneficial for the recovery of the Serbian economy. AmCham Perspective Magazine

The View from Switzerland

How do you find Serbian legislation for business? Which key laws do you think should be amended to make doing business here easier and better?

It is very important for us that current laws are being observed and that gradual harmonization with EU legislation is being implemented. For any business, knowing the rules is a precondition for a stable and growing business.

However, we can see that companies in Serbia face regulatory obstacles and some bureaucratic procedures, for example the period of time required to gain necessary export-import licenses. Simplifying these processes, reducing waiting time and harmonizing regulations, e.g. regarding product labelling, with EU regulation, would make doing business in Serbia easier and more efficient.

Is the Serbian Labor Law stimulating for companies?

The new labor act that has been announced appears to be more stimulating for companies regarding employment of experienced cadre, since there will be some changes that imply a lighter burden for the employer. The current law is more oriented towards protecting workers, and in times of crisis, it’s understandable that this is a tool for retaining employment rates. On the other hand, it does not give an employer the flexibility to adapt to market conditions and can sometimes reflect negatively on a company’s business.

However, Nestlé has developed a business strategy that allows us to grow and expand in times of crisis, so we did not experience restructuring and a big fluctuations in the number of employees, and the candidates that will lead our company forward are recognized and appreciated.

What changes will Serbia’s accession to the EU bring? Will it make business conditions easier or harder for your company?

Being a company from Switzerland, we are accustomed to business rules and customs prevalent in the EU. Serbia is on the way of receiving a final date for negotiations, which means that it will more intensively work on legislation harmonization. Applying the same rules means simplification of processes, such as import, export, obtaining licenses, etc. It also opens new exporting possibilities, product placement in the EU market and opportunity for products from Serbia to enter competition under the same conditions as other countries. Therefore, we see accession as an opportunity and a process that will make our business more efficient and stable.

What do you expect from 2013 in the context of the economy? Will it mark the beginning of recovery or will doing business remain hindered, and why?

According to predictions of the World Bank and the EU Commission, the economy will shrink more than estimated at the beginning of the year, and a high unemployment rate will continue pressure on recovery through the Euro zone. However, this year will not be as volatile as in the previous period, which is important for business in terms of planning. Predictions are that 2014 will be the year when we will finally see gradual recovery in the EU zone. Although predictions are not encouraging, we are optimistic that we will soon see the end of the recession that has hit hard in the Euro zone.

What is the situation in the Serbian food market?

The food culture in Serbia, and the Adriatic region altogether, is much emphasized, and it plays a very important role in the everyday life of people here. The rest of Europe does not have such an emotional approach to food, and this is actually an important driving force of growth for Nestlé, as part of the food industry.

This motivates us to listen carefully to the needs and wishes of our consumers, and we do develop specific portfolios for different communities. Therefore, MAGGI soup in Bulgaria is not the same as MAGGI soups that are sold in Serbia. It has been adapted for local taste and habits, and being such an important part of their lives, this is even more stimulating task for us.

In Western Europe, on the other hand, the trends of eating healthier and being concerned with nutrients are more and more present.

Industry has been hit hard by the crisis - how do you deal with this?

As I mentioned, we have developed a business strategy to deal with crisis. The pillar of our growth platform remains, our innovation and renovation of our products, which keeps our consumers interested in a very competitive market. Besides lowering prices, we have to offer our consumers something new and exciting, an added value that will keep them fateful to our brands.

A good example is the change we made to CIPIRIPI, which is one of our gluten-free products. A redesigned package, richer taste and improved quality of the product will attract new consumers and keep old ones. With this innovation, CIPIRIPI has already achieved sales growth of more than 30 per cent compared to the same period last year. Promotions, price reductions, and other point of sales activities are how we response to the crisis, but that only, without constantly enriching our product portfolio, is not sufficient to keep consumers and grow.

Are you satisfied with the way the state here treats food producers?

We have good relations with government representatives, and cooperation with the Ministries is on a good level. For us, it is very important that regulation related to fairness is observed, and that same business principles apply to all. As a big food producer in Serbia, we also have responsibility to, together with other business community representatives, identify common problems and propose solutions in order to improve business conditions.

As Nestlé has a long tradition of conducting business in the EU market, we are more than willing to share our experiences, especially now, when Serbia is moving fast towards the EU and when the same business rules and principles are to be implemented.