Polish government lays out patriotic food plans
At the end of June, Polish Prime Minister Mateusz Morawiecki unveiled what he called his government’s “plan for the countryside.”
He said it would raise “the level of security of Poles in three areas: family security, urban and rural security, and external security.”
“Let’s buy Polish products!,” Morawiecki beamed at a meeting with farmers in Silesia, in southern Poland, on June 27. “We want to rebuild state intervention in agriculture, which is necessary for price stabilization,” he added.
The plans are part of his government’s wider “Polish Deal” scheme to reinvigorate the Polish economy via higher tax revenues and more public spending.
The plans foresee the consolidation of a number of companies in the food sector, with a leading role reserved for the National Sugar Consortium (KSC).
KSC, which has revenue of about 1.7 billion zlotys (€390 million; $440 million), has selected Anglo-Dutch accounting organization KPMG as its adviser and has already been green-lighted by Poland’s Office of Competition and Consumer Protection (UOKiK) for the takeover of eight state-controlled companies involved in plant and animal breeding, as well as trading in agri-food products.
The government is planning for a total of 48 companies to join the new group, dubbed the National Food Holding. It will take over companies in sectors such as fruit and vegetable processing, as well as tobacco production.
In the near future, however, the government reportedly does not intend to enter areas dominated by large entities, including markets for milk and dairy products, or meat.
In an interview with Polish online finance and business portal money.pl, Artur Sobon, the deputy minister of state assets, said the new food group may be interested in entering the retail market, for example by taking over existing retail chains. If it did, analysts say, it would likely opt for smaller regional retail chains that include franchisees, or small shop owners cooperating with each other.
The plan also includes raising subsidies for fuel, and prioritizing organic, traditional and regional farming. The labeling of GMO-free products will also be introduced.
Economic patriotism
The plan is clearly in line with the government’s mantra of economic patriotism. In April, President Andrzej Duda launched a “consciously buy Polish products” campaign, asking shoppers to pay attention to where products come from and to prioritize Polish ones.
Later that month, the Polish Agricultural Ministry published a black list of “unpatriotic” firms that were importing milk products and “thus limiting sales of Polish farmers.”
The UOKiK also said it was investigating one of Poland’s largest supermarket chains, Portuguese-owned Biedronka, for selling foreign produce wrongly labeled as Polish.
No nationalization
Minister Artur Sobon made clear there was no plan to completely nationalize the sector, as that would be “unrealistic and unnecessary.”
“But a state-controlled chain of stores would certainly complement what we are working on,” he told money.pl on May 30.
The deputy minister of infrastructure, Marcin Horala, speaking to TVP television, said that the investment idea entailed a market entity which would pay farmers fair prices as well as offering products to Polish shoppers at reasonable prices.
The store would “not dominate the market,” Horala added. “But if it appears on the market, then other entities will have to adjust to the [new] rules of the game. They won’t be able to raise food prices offered to consumers,” he added.
Mixed reception
The plan has been subject to public consultations, and opinions are divided.
“It is highly likely that such a holding will be established in 2021, as only in May, the UOKiK approved the consolidation of eight agri-food companies into a National Food Holding,” Agnieszka Skonieczna from Polish market research company PMR told DW.
According to opponents of the idea, the nationalization of agriculture will limit the freedom of competition.
“A better solution than a forced state holding company, some argue, would be to create a federal structure of Polish companies in the agri-food sector and to favor the creation of a cooperative form of ownership by farmers and their ownership participation at all stages of the product supply chain,” Urszula Klosiewicz-Gorecka from the Polish Economic Institute told DW.
Wojciech Kruszewski, former president of the supermarket chain Lewiatan, told money.pl that he was skeptical about the idea. “We know perfectly well how state-run companies operated in the past,” he said. “Trade requires flexibility, and a state-owned company can be sluggish — it cannot keep up with the competition.”
Doubts about the National Food Holding have also been raised also by the Polish Organization for Trade and Distribution (POHiD), which argues that chains already operating in the market fulfill the tasks set by the holding with regard to cooperation with Polish farmers and producers,
On the other hand, supporters point to a minority role of Polish capital on agricultural markets, as well as monopolies and oligopolies in the processing industry. “In such cases, a National Food Holding would be a counterweight to Western capital,” PMR’s Skonieczna concluded.
Source: dw.com