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Witold Płocharski, Vice-President, Polish Association of Juices Polish Association of Juices ProducersProducers
The experience of the Polish fruit
and vegetable processing sector
Belgrade, Serbia, 24 Sept. 2009
Accession of Poland to EU Accession of Poland to EU took place took place
on 1on 1stst May 2004 May 2004Work on adjustment to EU Work on adjustment to EU
requirements of Polish requirements of Polish juices producers started in juices producers started in
19991999
Fruit & vegetable processing industry in Poland before/after accession;
Problems with legislation before accession, law execution & with products adulteration
Adjustment to EU requirements:
measures taken & the role of professional organisations,
the role of international organisations;
Current situation.
Topics to be presentedTopics to be presented
Trade barriers before accessionTrade barriers before accession
Internal barriers for import to & export from Poland;Polish import customs for e.g. concentrated orange juices were higher than in neighbouring countriesLegislative barriers;
External barriers for export to EU countriesQuotas, Duties, Minimal prices and other restrictions.
For current EU import duties for fruit juices and purees please see http://www.boecker-gmbh.com/images/tariff.pdf
Financial results of fruit & vegetable Financial results of fruit & vegetable processing industry before accessionprocessing industry before accession
-6
-5
-4
-3
-2
-1
0
1
2
3
4
1998 1999 2000 2001 2002 2003 2004 (I-VI)
Pro
fitab
ility
[%]
0
0,5
1
1,5
2
2,5
Inve
stm
ent r
ate
Profitability (gross)
Profitability (nett)
Investment rate
Source: State Statistical Office (GUS)
Financial results of fruit & vegetable Financial results of fruit & vegetable processing industry after accessionprocessing industry after accession
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
5
2004 2005 2006 2007 2008
Pro
fitab
ility
[%]
0
0,5
1
1,5
2
2,5
Inve
stm
ent r
ate
Profitability (gross)
Profitability (nett)
Investment rate
Source: State Statistical Office (GUS)
Good and stable financial situation of the Polish fruit & vegetable proc. industry since accession to EU
Production of processed fruit Production of processed fruit (thousand tons)(thousand tons)
0
50
100
150
200
250
300
350
400
2001 2002 2003 2004 2005 2006 2007 2008
Frozen fruit Concentrated fruit juicesJams, marmolades, pureesOther processed prpoducts
Source: State Statistical Office (GUS)
Production of J, N, & D Production of J, N, & D in Poland (thousand tons)in Poland (thousand tons)
0
200
400
600
800
1000
1200
1400
1600
1800
2001 2002 2003 2004 2005 2006 2007 2008
Juices total Nectars
Drinks Total J, N, D
Source: State Statistical Office (GUS)
ImImport of processed fruit and vegetables port of processed fruit and vegetables from Poland from Poland by other by other EUEU countries countries
Specification 2001 2002 2003 2004 2005 2006 2007 2008Processed fruit (1000 x tons)
Apple juice conc. 199 195 222 198 198 190 146 173Frozen fruit 220 207 194 178 211 234 209 189Canned fruit 9 10 10 18 30 40 48 24Jams, marmolades 1 2 2 3 5 11 15 13
Processed vegetables (1000 x tons)Frozen vegetabl. 197 185 219 217 212 223 234 254Canned veget. 17 16 27 27 33 34 45 41Pickles 9 10 12 15 17 16 21 18Dried vegetables 8 8 8 10 11 12 12 12
Source: EUROSTATSource: EUROSTAT
Shelves in Poland are overloaded Shelves in Poland are overloaded with juiceswith juices
You will not buy cheaper anywhereYou will not buy cheaper anywhere
Promotions in the hyper- Promotions in the hyper- and supermarkets and supermarkets
Imported Hey-Ho nectar 3x1L + 1L gratis sold at a price oImported Hey-Ho nectar 3x1L + 1L gratis sold at a price of f 2.4 Euro 2.4 Euro (0.60 Euro/1L)(0.60 Euro/1L)
PProducers often adjusted product’s quality to prices enforced by retailers
Cutting prices, the policy which influenced market balance
Grapefruit juice 1L – 0,49 Euro (2002)
Industry aIndustry adjustments to EU djustments to EU requirementsrequirements
Before PL accession to the EU there were several Before PL accession to the EU there were several legal instrumentslegal instruments
National (state), obligatory standards;National non compulsory; Branch standards;Company norms;Standards of scientific-technical societies and professional associations.
Legislation for juices/nectarsLegislation for juices/nectarsin Poland before entering EUin Poland before entering EU
Fruit juices (PN-A-75951);
Juices from southern fruit (PN -A-75959);
Juices for children (PN-A-75048);
Nectars (PN-A-75956).
In Poland (& other enlargement countries) the standards were not really observed due to ineffective official control system and high pressure exerted on producers by retailers to lower the prices of juices and juice containing products.
BBarriers in PN standards for the arriers in PN standards for the adjustment to the EUadjustment to the EU standardstandard
In PN standards no differentiation between direct juices and those from concentrate;
Minimum soluble solids 10 % for all except citrus juices;
In fact no parameters which could be used for product authenticity control;
In Poland different definition of nectars than in the EU;
Large differences in heavy metals and arsenic content in juices and nectars (the same for both types of products) in PN standards and the CoP.
LLegislation in Poland egislation in Poland – differences towards EU (cont.) – differences towards EU (cont.)
Nectar – beverage containing pulp, obtained from fresh or preserved by physical methods fruit puree diluted with water, with addition of sweeteners and acids and also other allowed chemical compounds except artificial colours, aromas and preservatives;
All clear nectars, such as black currant, aronia, cherry etc., were in Poland classified as juices;For export purposes these „juices” had to be reclassified to nectars with written permission of authorities (Hortex case), to fulfil requirements of the EU market.
An example of PN Standard for fruit juices An example of PN Standard for fruit juices separate separate standard for citrus fruit & other tropical fruit juicesstandard for citrus fruit & other tropical fruit juices
No. Characteristics listed in PN Standard Requirements of PL standard
COPfrom conc.
1-4 Sensory characteristics typical -
5 Soluble solids (oBrix) - also for juices from conc. 10 11.2
6 Sugar free extract g/L not less than 14 18-29
7 Total acidity g/L as malic acid 4.5 as citric 2.2-7.5
8 Volatile acidity as acetic acid g/L 0.5 – 0.7* 0.4
9 Ethyl alcohol % (V/V) 0.5 – 0.7* g/L 3.0
10 Ascorbic acid in vitaminised juices min. mg/100g 30 -
11 Environmental requirements in PN large differences toward COP
12 Symptoms of fermentation and molding impermissible -
13 Yeasts in 1 mL juice not present -
14 Patuline in apple/apple containing juices μg/L 30.0 50
Addition of citric acid to apple and grape juice acc. to PN – A – 75951 could not exceed 3g/L
*for raspberry, cherry, blackberry, elderberry and rose hips juice (PN-A-75951)(PN-A-75951)
Before accession we had ineffective Before accession we had ineffective control system control system
(and (and no clear division of functions of the control bodies)
The State Sanitary Inspection;
The Central Standardisation Inspectorate;
The Sanitary Inspection of Purchase and Processing of Agricultural Articles;
Commerce State Supervision;
Fitosanitary Inspection;
Veterinary inspection.
At presentThe State Sanitary Inspection (PIS -under Ministry of Health);
Agricultural and Food Quality Inspection (under Ministry of Agric. & Rural Development);
Trade Inspection (UOKIK – subordinate to the President of the Office of Competition and Consumer Protection);
Main Inspectorate of Plant Health and Seed Inspection (under Ministry of Agric. & Rural Dev.);
The Veterinary Inspection (under Ministry of Agric. & Rural Dev.)
The experience shows:The experience shows:Not all companies are playing fair game on the market;
Authorities are not especially interested in control of adulteration and are usually of little help;
State food control:Too dispersed to be effective,
Too far away from practice,
Focused on health issues,
Harmonisation of legislation is necessary.
Conclusions of Martin Greeve (EQCS) and KUPS experience
There are dThere are driving forces of riving forces of products adulteration & products adulteration &
corruptioncorruption
1. Desire to become rich at any price & ignorance of general moral barriers;
2. Sometimes banker’s credit trap;
3. Lack of proper legal barriers (standards, reference values etc.);
4. Pressure on prices by retailers - the price being a major driving force in developing markets, not quality.
Corruption Perceptions Index Corruption Perceptions Index - 2004- 2004http://www.transparency.org/pressreleases_archive/2004http://www.transparency.org/pressreleases_archive/2004
Estonia 6.0Slovenia
6.0Hungary 4.8Lithuania 4.6Czech Republic 4.2Latvia 4.0Slovakia 4.0Poland 3.5
Scale:10 – highly clean, 0 – highly corrupt
Polish business organisations intended to change the image of Poland and Poles in foreign countries (information transmitted from a radio on 3 Dec., 2004).
Polish Association of Juices Producers (KUPS) decided to join the initiative.
Also authorities created special body to fight corruption in Poland (Central Anti-corruptive Office established in 2006)
Corruption Perceptions Indices Corruption Perceptions Indices
Scale: 10 – highly clean,
0 – highly corrupt
http://http://www.transparency.orgwww.transparency.org//pressreleases_archivepressreleases_archive/2004/2004http://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_tablehttp://www.transparency.org/news_room/in_focus/2008/cpi2008/cpi_2008_table
Country 2004 2008Leaders: Fin. 2004/Den. 2008EstoniaSloveniaHungaryLithuania Czech RepublicLatviaSlovakiaPoland
9.76.06.04.8 4.64.24.04.03.5
9.36.66.75.14.65.25.05.04.6
Polish juice marketPolish juice marketPrices (PLN) of juices in relation to quality Prices (PLN) of juices in relation to quality
2000/20012000/2001Quality categoryacc. to AIJN Code of Practice
Grapefruit juices (N=22)Price modal value 2.81
Orange juices (N=41)Price modal value 2.66
Price range Price range
Min. Max. Min. Max.
Fulfilling COP requirements
1.79 4.62 2.09 3.8
Not fulfilling COP requirements
2.13 3.2 1.75 3.65
Source: W. Plocharski, IFW, Leipzig 2002
What this variation of prices What this variation of prices mmightight mean mean
Products were addressed to groups of different consumers – for low income groups prices were lowered; Producers were packing juices using adulterated raw material without having idea about its composition (e.g. using adulterated concentrate);Producers were deliberately adulterating their products declaring juice as 100% (sometimes even as direct juices) violating the principles of honest competition.
Thus the pressure of competition and deregulated prices had also some negative influence on juice market in Poland and other EE countries, where the control instruments were not effective.
Parameters COPRef. values
Authentic PL juice 100%
Declared as 100% juice (no sugar added)
Declared as 100% juice
Relative density oBrixTotal acidity Formol numberGlucose g/LFructose g/LG/FSucrose g/LSugar free extract g/LCitric acid mg/LL-malic acid g/LAsh g/LPotassium mg/LSodium mg/LPatuline μg/L
1.040/1.04510/11.22.2-7.83-1015-3545-850.3-0.55-3018-2950-200min. 3.01.9-3.5
900-1500max. 30
50
1.046911.44.74.2
22.764.10.3514.519.81006.32.6 -223.1
1.046511.3
52.517.837.80.4352.811.927612.81.352423.40.7
1.04310.55.21.4532.443
0.7725.110.8542741.21
31810114.9
Authentic and adulterated apple juices in Authentic and adulterated apple juices in 2002/2003 in P2002/2003 in Polandoland due to ineffective official due to ineffective official
controlcontrol
Water dilution of juices - most often;Sugar addition without declaration – occasionally;Acidification without declaration – quite often;Simultaneous addition of acids and sugars - many cases;Addition of synthetic flavours – some cases;Blending of other (cheaper) fruit materials – sometimes;Juice content deviations in nectars – several cases;Juice from concentrate declared as direct juice -
occasionaly.
Adulterators mAdulterators manipulatanipulate e rawraw materials materials andand//or or final productsfinal products compositioncomposition
This creates possible threat to stabilized EU market
In Poland in 2002 a regulation was passed putting restrictions on retailers in respect to establishing unjustified price level.
In practice it had little effect on the situation on the market – apparently the authorities do not know how to use the instruments.
Chapter 2Prohibition of using the dominant position
Art. 8. 1. It is prohibited to use the dominant position on the market by one or more enterprises.2. Abuse of the dominant position consists in particular on:
1) enforcing directly or indirectly dishonest prices, including excessively high or particularly low prices, long payment terms, or other conditions of purchase or sale of goods;
… 6) imposing by entrepreneurs conditions of contracts which are
difficult to fulfil, bringing them unfounded profits; 7) creation of arduous conditions for the consumers to execute
their rights; 8) partition of the market according to territory, assortment or
supplier criteria.
Regulation on protection of competition and consumers (15 Dec. 2000)
Law enforcing proper labelling and quality
In recent years law has been improved in reference to control of In recent years law has been improved in reference to control of improper labelling and quality of agricultural food articles. improper labelling and quality of agricultural food articles. Two important laws were amended as required by the Two important laws were amended as required by the European regulations and directives:European regulations and directives:
Law on safety of food and nutrition (dated 25th August Law on safety of food and nutrition (dated 25th August 2006);2006);
Law on quality of farm and food articles in trade (dated Law on quality of farm and food articles in trade (dated 24th 24th Oct. 2008).Oct. 2008).
In both laws fines for not fulfilling requirements are In both laws fines for not fulfilling requirements are substantially increasedsubstantially increased..
The driving forces preventing The driving forces preventing adulterationadulteration
Honesty;Dignity;Fear of losing market;Law and state control if properly executed;Industrial self-control
Polish Assiciation of Juices Producers took initiative to Polish Assiciation of Juices Producers took initiative to clear the market of adulterated products and to clear the market of adulterated products and to establish Voluntary Control System.establish Voluntary Control System.
In this activity we received great support within QUISEE In this activity we received great support within QUISEE Project, run by SGFProject, run by SGF..
KUPSKUPS own activity to implement own activity to implement the rules of honest competitionthe rules of honest competition
Translation of Code of Practice and its distribution among processors, retailers, administrative bodies;Information about our control work of official authorities and their involvement; Creation of Voluntary Control System (DSK);
Preparation of regulation documents for DSKStatute,Selection of laboratories,Working procedures, etc.Systematic market control & execution of fair competition by all possible means;
Application for the membership of EQCS;Agreement (January, 2006) on closer cooperation with state control body (DSK auditors are recognized by Agricultural & Food Quality Inspection (GIJHARS).
Our own activity to implement Our own activity to implement the the rulesrules of fair competition (contof fair competition (cont..))
In our case the success really has many fathers
Numerous symposia & workshops organized to promote DSK (each year at least 1 symposium and 1 workshop);Many articles published and a few press conferences organized; Polish Voluntary Control System website opened;Huge work done by members of the Polish Association of Juices Producers and our European partners to achieve common aim – smooth integration of the Polish juice industry to the EU.
DSK membersDSK membersParticipants in 2002:
Agros – Fortuna Sp. z o.o., Alima Gerber S.A.,Aronia S.A.,Emig Sp. z o.o., Hortex Holding S.A., Soki Dr Witt Sp. z o.o., Sokpol Sp. z o.o. Kauko – Metex Sp. z o.o. (supporting member).
Participants in 2009: Agros-Nova Sp. z o.o., Fructa Napoje Sp. z o.o.,Emig Sp. z o.o., Hortex Holding S.A., Sokpol Sp. z o.o.,Tymbark S.A.
It is estimated that members of the Polish Voluntary Control System supply about 80% of juices and nectars and majority of fruit drinks, which so far are not covered by control system.
Over the years number of DSK members was changing due to company ownership changes (Soki Dr Witt Sp. z o.o.) or withdrawing from the market (Alima Gerber S.A., Aronia S.A.)
Polish Voluntary Control System in Polish Voluntary Control System in figuresfigures
Specification 2000 2001 2002 2003 2004 2005 2006 2007 2008
DSK Members – – 8 9 8 9 6 6 6
Market control % 21 33 50 80 80 80 80 80 80
Costs of analysis ( zl) 42.9 41.9 94.4 106 133 91.4 115 115 38.5
# of controlled producers 24 18 22 15 15 15 15 15 13
# of samples taken 41 43 199 233 157 131 149 124 141
# of analysed samples 41 43 105 1901 1142 1193 1044 935 786
Audits in factories – – 7 6 7 7 7 7 5
Including juices & nectars: Including juices & nectars: 11150150 22111 111 33117 117 449393 5551 51 667878
Source: Polish Voluntary Control System (DSK)
Deviations in chemical composition Deviations in chemical composition of juices and nectars in Polandof juices and nectars in Poland
0
10
20
30
40
50
60
70
2000 2001 2002 2003 2004 2005 2006 2007 2008
% of deviations
Source: Polish Voluntary Control System (DSK)
R2 = 0,8867
010
2030
4050
6070
8090
1998 2000 2002 2004 2006 2008 2010 2012
Shock of control?
Proof of confidenceProof of confidencesecond cooperation agreement signedsecond cooperation agreement signed
Test results of official control Test results of official control (courtesy of (courtesy of GIJHARSGIJHARS, , 20072007))
Juice or nectar No of investigated samples
No of adulterated samples
No of doubtful samples
Orange juice (OJ) 21 2 41)
Orange nectar (ON) 5 1 -Grapefruit juice (GJ) 7 1 22)
Grapefruit nectar (GN) 2 - -Apple juice (AJ) 16 3 13)
Black current nectar 11 2 (sorbitol) 54)
Banana nectar (BN) 3 - -Tomato juice, salted (TJ) 2 - -
Total 67 9 121) slight deviations in single parameters (either D-isocitric acid or phosphorus);2) slightly too low density, or D-isocitric acid);3) single, slight deviation in citric acid content;4) slightly too low fruit content (citric acid, K, ash), however in concentrated juices the same problem.
Definitely adulterated - 14.9%, suspicious – 17,9
Impartial opinions on Polish juices Impartial opinions on Polish juices inin „„Świat KonsumentaŚwiat Konsumenta”” - - March 2007March 2007
((The Consumer World) – The Consumer World) – CONCLUSION„Control carried out allows to conclude that, the investigated orange juices bought in Polish shops, characterize by typical, as required characteristics, and slight discrepancies of permissible values cannot unequivocally be interpreted as an attempt of adulteration”
Investigations of „Hortex”, „Clippo”, „Leader Price” „Tymbark” and „Fortuna” juices were carried out in an accredited laboratory in Germany
All rights reserved
Investigated parameters Requirements
Pain of adjustmentPain of adjustmentAdjustment of the Polish fruit juice industry to the EU Directive 2001/112/EC (Regulation of the Polish Ministry of Agric. and Rural Development dating 30th Sept. 2003) required:
Change of nomenclature (two categories of juices);Change of statistical classification of „pseudo juices” e.g. from sour cherry, aronia, black currant to nectars;Introduction of a new category of clear fruit nectars;Change of labelling;Change of technological recipes (an increase sugar free extract and Brix level in most juices by at least 12%);
and the most important …Change of philosophy in plant and quality management, marketing policy etc.Now it happens that producers control their competitors by ordering analyses of their products;
Consistent work step by step
1999 – Fruit & Vegetable Juices & Drinks – Today & in the XXI Century (First juice symposium and direct contacts with
EU organisations);2001 – Code of Practice translated;2001 – QUISEE project started; 2002 – Cooperation agreement between SGF & KUPSiNB signed in Zakopane2002 – Joining AIJN (full membership in 2004);2002 – Voluntary Control System in Poland (DSK) established;2004 – Joining EQCS (full membership in December 2005).
KUPS/DSK in EUKUPS/DSK in EU
Polish Association of Juices Producers (KUPS) – a member and a partner of the following organisations:
AIJN has been a great partner for our association and the industry as a whole and we can always rely on its support;
All experiences, information and help of the EU fruit industry were available for Poles as promised by President Peter Eckes & Vice-President of EQCS Martin Greeve;
We received all needed support and help necessary to establish and run Voluntary Control System from SGF as promised by its president Dr. Karl Neuhäeuser.
Role of these professional Role of these professional organisations in an adjustment organisations in an adjustment
to the EU requirementsto the EU requirements
The above meant that we did not have to open already opened door
CLOSING REMARKSCLOSING REMARKS
DSK activity initiated within QUISEE Project resulted in an increase of official control institutes activity and consumers awareness;It also disciplined retailers directing their expectations towards quality and authenticity of products supplied by juice industry;DSK activity resulted in drastic decrease of unfair competition between juices and nectars producers as well as traders selling these products in Poland;In Poland DSK became an example how to solve problems of unfair competition in other food producing branches.
Poland and in particular Polish fruit and vegetable processing sector made a great step forward adjusting to the requirements of the European Union;
Polish Association of Juices Producers has been recognized by the Ministry of Agriculture and Rural Development and GIJHARS, the state control body, as an industrial partner.
Polish Voluntary Control System for juices (DSK) was established and works quite effectively (for its activity in the area of market control the Polish Association received from „Handel” („Trade”) journal the prestigious „Trade Crown 2006 Award”);
CLOSING REMARKSCLOSING REMARKS
Benefits of Poland accession to EU Benefits of Poland accession to EU for Polish fruit juice industry for Polish fruit juice industry
((incl. incl. KUPS success)KUPS success)
Full access to EU market;Full membership in AIJN and EQCS – partners not outsiders;Participation in QUISEE Project – Cooperation with SGF in improvement of juices and nectars quality; EU co-financing of promotion of F&V processed products:
Promotion of carrot juices & nectars on Bulgarian and Romanian markets (2006),Project „5 a day fruits and vegetables” (2 millions Euro for 2 years since Oct., 2008);
Participation in „QUALI-JUICE” EU Project – development of a warning system against microbiological spoilage in juice production (2006-2008).
Prospects for increased prosperity Prospects for increased prosperity of the FAV processing sector in Poland of the FAV processing sector in Poland
within EUwithin EU
Abundant, relatively cheap labour;
Highly competitive and well developed horticulture;
Modern fruit and vegetables processing industry;
No customs, no legislative barriers within the Common Market.
