The Polish food industry is a big player in European markets. The meat industry is the largest slice of the pie, making up 25% of the sector. WBJ.pl speaks to Andrzej Pawelczak, of Animex, about how the economy of meat has changed over the years

Roberto Galea: Polish consumers often purchase foreign goods rather than Polish, thinking that local products are inferior. This does not apply to food products, however, and foods “Made in Poland” are considered better than imported products. Why is this so?

Andrzej Pawelczak: In my opinion this comes from the fact that for decades Polish consumers depended on Polish [food] products.

Another reason is that consumers can identify with these products. They can see the orchards where apples grow and the farms where milk comes from. Knowledge of the origin of the product is essential for the consumer.

Finally, consumers know that, unlike foreign brands and products, Polish brands are here for good. One week [one can buy] a foreign brand, while the next it's not available in stores. Consumers also know that food and health inspections in Poland are of a very high standard and very rigorous about the ingredients and additives added to the final product.

What is the Polish meat industry like today?

The meat industry is considered the “heavyweight” of the food industry in Poland. This means it has the greatest slice of the food industry pie in Poland, amounting to around 25 percent of the total turnover, workforce and capital invested in the food industry in general.

In order to appreciate how important it is, one would have to analyze the history of the industry.

A couple of decades ago, food was rationed in Poland, and even before that the food industry was politically driven. During those communist times, a number of meat plants were set up which still make up the backbone of the meat-processing map in Poland today.

These plants were caught up in the privatization craze that swept Poland between 1995 and 2003, and most of those plants became private. At the time Animex was taken over by Smithfield [the world’s largest pork producer and processor], while the second-largest Polish industry player, Sokołów, was taken over by a Scandinavian investor controlled by Danish Crown.

Since then, Animex having eight meat plants became the largest player in the market. Today the company is considered to have up to 10 percent of the Polish red meat market and 15 percent of the white meat market.

How did the Russian meat embargo affect the Polish meat industry?

Taking into consideration the size of our neighbor, it is logical to say Poland should be a natural exporter of meat to Russia, which is not able to produce enough meat to meet its own demand.

The problem is not that Russian consumers dislike Polish meat, but [the embargo] is to a greater extent politically driven. The fact that Russia imports meat from other markets and not from Poland results in higher prices for the end consumer, so it does not make much sense. Unfortunately the Polish business community, and not just the meat industry, has had to pay the price for these facts.

How have things changed since the embargo was lifted?

Media say that the embargo was lifted because a mere eight Polish plants were approved for the export of meat to Russia. There are 850 meat plants that meet EU standards and have been approved to export meat and meat products to Europe.

If these plants have met the strict standards required by the EU, why have only eight been approved by Russia? These are only a “drop in the bucket,” taking into consideration both the Russian export market and the Polish meat-production market.

When one takes into consideration that Poland exports ca 350,000 tonnes of meat, mainly to the EU, 100,000 tonnes for Russia would not be far fetched for such a large country.

How has the meat industry been affected by the current financial situation?

As far as the financial crisis is concerned, we have noticed that consumer trends have swung away from our premium products to our mainstream products. We are quite optimistic about the next few months. The [meat] industry is having a hard time, as are all industries right now, but we have not yet seen any major drop in sales yet.