21 April 2004

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Supermarkets could gang together to import food

The EU brings with it a host of challenges and Malta’s traditional businesses, the long established importers of food and related products could be hard hit. The Malta Financial and Business Times contacted 20 food importers, but only two were willing to speak about future prospects.
With at least one supermarket set to bring in foreign partners and stock its shelves with at least some of its own imported brands, other large supermarket owners could be ganging up to do a bit of importing themselves, The Malta Financial and Business Times has learned.
Italian supermarket giant SISA is in the process of opening several outlets in Malta with more planned in the coming years.
In Italy SISA’s own label accounts for between five and six percent of its total sales, but with Malta opening its doors to free trade the spectre of importation by foreign owned companies looms large.
EU membership will, however, also bring opportunities both for consumers and importers.
Consumers may change eating habits
Chris Gauci Director of Wembley Stores Co Ltd told The Malta Financial and Business Times: “The removal of levies will make a whole range of products more affordable and encourage more frequent use.
“This in itself may change eating and cooking habits. Particularly, items such as prepared sauces, baked goods
and ready to serve meals will be more attractively priced and are suited to today's lifestyle.”
Asked whether supermarkets importing their own products would affect the importers, Peter Paul Bonnici, the managing director of General Distributors Limited, said: “We can only wait and see,” but added that he did not expect his business to be affected.
When The Malta Financial and Business Times asked him whether importers could open their own supermarkets, Bonnici replied that he did not believe so.
While it is expected that some supermarkets will be selling their own brands, Chris Gauci is not convinced they will present a challenge to the established ones.
Gauci said: “own brands must establish their position in the market, ie price vs quality. Established own brand products normally offer good value for money. They will not replace brand leaders, but they will compete with secondary brands.”
Vertical integration could be an option in the new business environment, but while supermarkets owners are considering importing Gauci does not believe importers will move into the retail sector. “Importing food and running a supermarket are two completely different
businesses. It is an unlikely option.”
Gauci does not fear the new business scenario, and told this newspaper: “We anticipate changes and are prepared for the challenges and new opportunities. We expect to move steadily forward.”

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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