“Informal economy is thriving, you can’t possibly compete with someone who sells products and doesn’t pay taxes. They’re selling alcoholic beverages by the side of the road, where else in the EU can that happen?” Ioan Micula, one of the owners of the group told Ziarul Financiar.
The three large companies (European Food, European Drinks and Transilvania General Import-Export) of the group controlled by brothers Ioan and Viorel Micula posted EUR432 million revenue and employed 7,500 people together in 2002, according to Finance Ministry data.
The latest available information show the three to have posted EUR386 million revenue in 2011, while the number of employees fell by almost 1,900 compared with 2002.
“We had a significant drop in sales and decline in brand value,” Ioan Micula said.
The peak years for the food industry business of the Micula brothers were 2007 and 2008, when sales came close to EUR900 million, as they said at the time. The 2005-2009 results of the companies of the group cannot be found on the Finance Ministry’s website.
Back in its heyday, the Bihor-based group competed on equal footing with multinationals like Coca-Cola and Pepsi (mineral water and soft drinks), Heineken and SABMiller (beer), Kraft and Nestle (sweets and wafers).
European Food’s Burger beer brand was the leader in retail sales in 2007, according to market data. Two years later it had lost ground and dropped out of the top three best-selling beer brands, despite the more than EUR100 million investment in the brewery with a capacity of over two million hectoliters. European Food revenue too dropped, shrinking by 12% in 2011 year-on-year.
European Drinks, which makes Frutti Fresh and Adria soft drinks, had 51% market share in its business in 2001, almost as much as Pepsi and Coca-Cola together, according to ZF data. Low prices eventually turned out to not be a good strategy in competing against multinationals, and Micula brothers’ brands lost ground against international brands.
The group also owns the Izvorul Minunilor (mineral waters) and Naty (wafers) brands. Ioan and Viorel Micula own spirits producer Scandic Distilleries, as well whose 2011 revenue stood at EUR14 million.
They also had a farming company, Westgrain, working about 8,700 hectares of arable land in 2011, according to Agriculture Payments and Intervention Agency (APIA) data.
The biggest business of the group is Transilvania-Import-Export, whose revenue stood at EUR215 million in 2011, according to the latest available data. The company was among the 20 largest in Romania in the early 2000s, but by 2011 its revenue had shrunk to less than 2002 level.
(English version by Loredana Fratila-Cristescu)