Supermarkets Catch On in Moldova

Residents of Moldova, once mired in economic doldrums after the dissolution of the former Soviet Union, are now anticipating the benefits of an upbeat economy. Stabilization has come to town, and since 1996, private enterprise is turning negative growth rates into big pluses.

U.S. exporters wanting to make competitive waves need to check out this small country nestled between Ukraine and Romania.

What's in demand? Poultry meat, cheese, butter, canned vegetables and soft drinks; local versions of these products are limited and poor in quality. However, imports coming from Israel, Germany, France and Italy carry price tags beyond the means of many consumers.

While official reports show most monthly incomes fall between $38 and $50, estimates of urban paychecks place the figure between $50 and $175. Some hard-working, younger professionals employed at private and foreign enterprises are earning up to $1,000 monthly.

A flourishing underground economy, now estimated as high as 30 percent of the gross domestic product, lingers. But as private retailers stack their shelves high with reasonably priced, quality products, this market is expected to lose its impetus.

In July 1996, the first free-trade zone was established in the capital city of Chisinau. By February 1997, 31 companies were selling products exempt from import duties and the value added tax, attracting a loyal customer base.

No family-owned specialty stores here. Moldovans, unlike their neighbors, have always shown a preference for larger food stores.

From 1990 to 1995, the large state-run stores faced marketing and supply problems. Most went bankrupt. So when private supermarkets, based on U.S. models, first opened in 1996, they found immediate popularity. Make room for salad bars, frozen foods, seafood and dietetic foods!

Foreign investors believe in the future of Moldova and its citizens. Plans to build and modernize several hotels in Chisinau are in the works. McDonald's aims to be at the forefront of U.S. fast-food restaurants in the country--opening 14 outlets, in almost all the major cities.

In staging this turnaround economy, Moldova's 4.4-million population has demonstrated remarkable resilience. Exporters wanting to participate in the expected growth market in high-value food items should keep tabs on these developments.

Moldova has applied for full membership in the World Trade Organization. If accession succeeds, U.S. exporters can look for reductions in tariffs.

Product	Rate (%)
Meat	20
Fish & seafood	5
Milk & dairy	20
Coffee & tea	15
Pasta	5
Chocolate	40
Misc. foods	20
Water & juices	20

The largest U.S. sales years for Moldova--1993 for wheat and 1994 for coarse grains and planting seeds-- reflect buying patterns influenced by an erratic economy.

Now experiencing economic growth fueled by a burgeoning private sector, the Moldovan marketplace is a prime candidate for exporters of U.S. consumer-oriented agricultural products.

The author is an agricultural specialist in FAS' Office of Agricultural Affairs in Sofia, Bulgaria. Tel.: (011-359-2) 963-1247; Fax: (011-359-2) 981-6568; email: AgSofia_PO@fas.usda.gov.