The company owes EUR8 million to the Agriculture Ministry as damages in the ‘bird flu case’.
The court-appointed administrator of Galli Gallo is Centu SPRL, represented by Aurel Centu in Brasov. On the website of the Brasov Court, CEC Bank and Piraeus Bank also feature in the company’s insolvency case.
Galli Gallo, which sells its products under the “Penes Curcanul” brand, had total debts of EUR36 million at the end of last year, sales of EUR34.4 million and 392 employees.
Galli Gallo is 60% controlled by businessman Catalin Muntean, mayor of the small town of Codlea, Brasov county. The remaining shares are held by businessman Florin Macovei.
Catalin Muntean and Florin Macovei were involved in the bird flu scandal in 2006 through company Patiprod.
“The causes for the insolvency are many, one of them is that the Agriculture Ministry did not agree to us rescheduling the debt, as well as the antibiotics scandal at the beginning of the year, which cut our sales in half,” said Razvan Sandru, the company’s general manager.
In March this year the Rapid Alert System of the European Commission on food safety, said Romanian turkey meat reportedly with traces of antibiotic had reached Germany, but later the allegations proved unfounded.
“So we had to cut prices by 20-30% in order to limit the sales decline. The price drop put a EUR4-5 million hole in the company’s sales,” the Galli Gallo official said.
Sandru adds the company will not make personnel cuts as part of its cost-cutting drive.
In Romania, 20,000 tons of turkey meat are sold per year and producers have a total turnover of around EUR50 million, according to market data.
But the niche of turkey meat accounts for just a few percent of the total poultry meat segment.
The poultry meat industry is still suffering amid low consumption.
Last year several companies among the top ten producers saw their profit drop almost to zero because the cost of animal feed nearly doubled amid a low grain production. Feed costs cover 60-70% of the end price of meat.
(English version by Daniela Stoican)