FMCG distributors see stagnation this year

The business of the top ten distributors of FMCG, which rose at a rate of 15-20% in the last two years, reaching a value put at 2.3 billion euros in 2008 by ZF, could see stagnation or even decline this year, the companies in the sector anticipate. “I don’t think there will be market growth, if talking strictly in figures. The year 2009 will a year for the market to settle,” says Wael El Ghadban, general manager and shareholder of Top Brands Distribution, the second largest company specialising in distribution of consumer goods on the Romanian market. It posted 50% turnover growth last year to approximately 330 million euros. El Ghadban believes the best scenario for a company in this business is “modest growth” in 2009 compared with the previous year, provided that the marketing strategy should be adjusted to the market conditions. Some players have already signed partnerships with new suppliers as a way to make sure they will post growth this year. In addition, the depreciation of the RON will affect FMCG distribution companies’ profits, as this sector operates with some of the lowest profit margins in the economy. “Financial expenses will certainly be higher this year and the exchange rate increase in turn will have a negative influence on the profitability of companies in this business,” says Ioannis Ferfelis, general manager of Elgeka-Ferfelis Romania.