Experience of the Moldovan exporters to the Czech market was assessed based on the analysis of Moldovan mass media publications, a survey of 21 Moldovan companies that exported in the Czech Republic in 2004-2006 and in-depth interviews with 5 Moldovan companies.
There are many examples of good economic cooperation between Moldovan and Czech companies. One practical case is the Moldovan DAAC-Hermes company working as Skoda’s dealer in the Republic of Moldova. One senior official of the DAAC-Hermes has stated in a public interview that “the relationship between the two companies goes beyond simple business relationship” and that “with Czechs you can build not only good business but also very warm human relations”.38
As suggested by the survey, two-thirds of the companies exporting to the Czech Republic work in the wine-making sector or other food sectors. The main products exported by Moldavian companies to the Czech Republic include a wide assortment of wines (dry, demisec, sweet, sparkling wines) and other alcoholic drinks (brandy). Also, among other products exported by Moldavian entrepreneurs on the Czech market are: concentrated apple juice, concentrated cherry juice, plum pulp, dehydrated plums, micro-fibers.
According to the survey data the typical exporter to the Czech Republic appears to be a medium-sized (50-249 employees) private company located in Chisinau. However there are also companies which are quite successful exporters and are based in other cities and regions: Balti (exported textiles, clothes, meat products, wine, brandy, vodka and soft drinks to the Czech Republic), Transnistria (metal products, power cable), Orhei (wines and natural juices), Ungheni (dried fruits), Calarasi (canned fruits and vegetables). A number of wine-making companies located in Ialoveni, Taraclia, Cahul, Straseni, Hancesti and Anenii-Noi have also registered exports to the Czech Republic.
Trends of the Moldovan exports are quite encouraging. Half of the surveyed companies have increased their sales to the Czech market in 2006. One quarter of the interviewed companies said that their exports to the Czech Republic remained the same, while one quarter reported decreased exports. The growth of exports to the Czech Republic is even more important as it took place against the background of plunge in overall exports by these companies. This reflects to some extent the attempts by the wine-making companies to discover new markets and cover losses infringed by the barriers imposed by Russia on imports of Moldovan alcoholic beverages and vegetal products. At the same time this rise in exports is relatively small. Most of the increase in exports in 2006 is due to more active companies exporting fresh
38 The interview „Moldovan wine in Czech glass“ given by the DAAC-Hermes vice-president Igor Scherbinsky to
the weekly magazine „Economic Review Logos-Press“ («Экономическое Обозрение Логос Пресс»), no.16 (656) of April 28, 2006.
51 and dried fruits, gems and marmalades, brandies, and metal products. However, in majority of cases share of exports to the Czech Republic make up for less than 3% of total exports of the companies. What Moldovan exporters find most attractive in the Czech markets? First of all, it is growing purchasing power and growing demand for categories of products that are supplied by Moldovan companies. Secondly, availability of a reliable and stable Czech partner is a key for the success. Not accidentally, most of companies which increased their sales in the Czech Republic boast stable and trustworthy relation with their Czech counterparts. Also these partners often put forward precise and efficient proposals on how to enhance competitiveness of Moldovan goods imported to the Czech market. Thirdly, there are some other perceived advantages in exporting to the Czech Republic, such as the advantageous prices in Czech Republic, simple customs rules, low taxes, and simple technical standards. Companies exporting to the Czech Republic mentioned that their exports grew due to efficient promotional activities. There is also a flip-side, though. Companies find serious barriers for their exports to the Czech Republic as well. The main difficulty regards lack of information on business opportunities on the Czech market. Another thorny issue is lack of established partnership relations with Czech counterparts. Companies with no reliable local partner find it increasingly hard to expand export operations in the Czech Republic. These companies often experience problems in dealing with customs procedures and conforming to the technical standards. Finally, several Moldovan companies find it hard to raise sufficient funds to carry out promotion campaigns or blame Moldovan competitors for damaging image of Moldovan wines by exporting low-quality products.
What can be done in order to make these barriers less thorny? In this respect exporting companies would like to see more involvement of Moldovan public authorities in organizing more exhibitions and fairs for promotion of Moldovan products; ensure better information on export opportunities, business contacts and relevant procedures through a specialized infocenter; better marketing strategies; easing customs tax burden on Moldovan goods and quality adjustment to European standards; cumbersome visa procedures (this however may improve considerably when Czech Embassy in Chisinau starts issuing visas). Many wine-making companies also find scope for higher governmental involvement in limiting exports of cheap and low-quality wine from the Republic of Moldova, and thus improvement of the image of Moldova as homeland for high-quality wine-makers. However significant efforts should come from the part of the companies who have to be aware of the highly competitive environment dominating the Czech market. Some companies also find it reasonable to combine efforts by establishing a joint representation center in the Czech Republic that would allow for better sales coordination, marketing and market research of the Czech market. Nevertheless, previous experience with establishing the Moldovan Trade House in Prague has not so far proven a success.
Czech accession to the European Union apparently did not exercise any serious effects on Moldovan exports to this country. It may well be explained by the fact that Czech quality and other requirements were adjusted to the European standards well prior to accession per se. Introduction of the GSP+ trade regime by the European Union have not produced any significant influence on Moldovan exports to the Czech Republic as well. This regime does not cover wine exports to the EU, so it has not touched in any way wine exporters who make up for lion’s share of the companies with exports to the Czech Republic. Nonetheless, expectations of benefits that would come from the eventual introduction by the EU of the Autonomous Trade Preferences ride high. Almost all companies expect this new regime to provide boost to their exports to the EU in general and the Czech Republic in particular. This will not be an easy walk anyway, as high quality requirements for Moldovan exports will stay in place. Therefore, Moldovan companies have to learn how to ensure and maintain good quality of their products.
All in all, the surveyed Moldovan companies expect growth in their exports to the Czech Republic in the following couple of years. Most probably, this growth will come from confluence of several factors, such as quality improvements in Moldovan exports, better knowledge of the local market, establishment of the lucrative partnerships with the Czech companies and eventual increase in the openness of European market if the EU Autonomous Trade Preferences are granted to the Republic of Moldova.
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