Belarus planning to liberalize chilled and frozen seafood import
As one of primary measures aimed at liberalization of the nation's economy plans Belarus is planning to lift restrictions for import of chilled and frozen seafood. More specifically, by 20 March 2009 the state bodies have been commissioned to prepare a draft order and introduce it for President's consideration, reports www.fishnet-russia.com (www.fishnet.ru) with reference to Naviny.
The idea of the government is to boost number of players on the market, stronger competition to finally result into a drop of product prices. On the other hand, experts say, the government will hardly wish to lose control of this profitable business. According to the order dated as far back as 2003, Belarus President has introduced state control of import, processing and sales of seafood which has resulted into a start of state monopoly on the national seafood market. The right of full control of seafood import has been given to President's Administration for the sake of "securing appropriate inflows to the budget and defending economic interests of the state". Seafood import quotas have become another important development of that period.
The regulatory measures have resulted into a decrease of the number of market players. More specifically, in 2002 (prior to the above regulations) 90% of all the seafood products consumed in Belarus were supplied by 140 companies most of which were private businesses. However, in 2004 there were only 46 importers and in 2008 only 28 companies, mostly large state-owned establishments, were engaged in seafood importation.
When strengthening control of the seafood market development, the government has aimed at providing the nation with high quality seafood at affordable prices. However, the target has hardly been hit because starting from 2002 Belarusans have been consuming less fish mostly due to rising product prices.
Earlier, fairly liberal conditions of operation on the market in mid-1990s helped improved the situation with seafood import and consumption in the country. More specifically, in 1990-1995 seafood import to Belarus decreased from 180,000 tonnes to 60,000 tonnes and the total consumption went down from 210,000 tonnes to 70,000 tonnes. Later on stronger competition between players and resulting decrease of prices did their part and by the year 2002 import came up and per capita consumption increased to 17 kilos versus 7 kilos in 1995. Since 2002 seafood consumption in Belarus has been stagnating at 17 kilos versus 18 kilos per year recommended by the physicians. President Lukashenko has set a target to bring consumption to 20 kilos per capita in 2009-2010.
The capacity of Belarus's seafood market is estimated at 200,000 tonnes per year, while the country's import is estimated at 150,000 tonnes.
At the same time, so far the government has been in no hurry to cancel or at least reduce the customs duties for seafood import, while these duties contribute a large share of the product price. Experts say that such soft regime would be just logical taking into account that Belarus has no own access to the sea.
Notably, in 2007 at Russia's request the government of Belarus has lifted restrictions for volumes of seafood imported into the country. However, in exchange for it, the exclusive right for seafood import has been granted to the state (just like the case with other profitable goods such as tobacco and alcohol.
With the import quotas having been cancelled, the government has also toughened its requirements to importers willing to bring seafood to the country. As a result, the number of seafood importers has more than halved from 62 to 29 namely. The government however explains the decrease of the importers number by the fact that 14 large companies have been actually importing 84% of the products and all of these companies have continued purchasing fish abroad. The list of such big importers includes state-owned Belryba (subordinate to President's Administration) and Minskrybprom, SP Santa Bremor (joint venture), ODO Vitalur and others.