Prices in Montenegro are by far the lowest in the region compared to the duties we have. I agree that prices are higher than they used to be, but that it is not the fault of the retail chains. We should all sit down at the table - retailers, importers and state representatives - and see where the problems are and try to find a solution, said the majority owner of the largest supermarket chain in Montenegro, "Voli". Dragan Bokan at the panel titled "Boycott of Trade - Who Wins and Who Loses?" which was held yesterday at the Faculty of Economics in Podgorica.
The citizens' group Alternativa, which was part of the Europe Now Movement in the previous elections, called on citizens three days ago to boycott the stores of the "Voli" retail chain next week, from February 17th to 24th, because it was chosen by citizens in a poll.
The Faculty of Economics previously published an analysis according to which the prices of food products in the period 2021-2023 increased due to higher producer and import prices, but also due to rising costs at large retailers due to an increase in gross wage costs, which were 2024 percent higher in 2021 compared to 42, despite a reduction in wage taxes.
"We have been driven to the wall and as the largest retail chain with the lowest prices in Montenegro, the largest employer in Montenegro, the largest taxpayer among retail companies, the largest domestic food producer and the largest purchaser of domestic products, we must defend ourselves from Facebook groups and populist and destructive stories," said Bokan.
Significantly lower duties in Croatia
At the panel, he presented data on his company's operations, as well as margins and duties in Montenegro and the region.
He compared the examples of Croatia, a member of the European Union, and Montenegro. In Croatia, VAT on basic foodstuffs is five percent, and in Montenegro it is 7 or 21 percent. He gave examples for all products, so for his sales of milk and dairy products, where the VAT rate is seven percent, he paid a total of 2,7 million euros in this tax, while in Croatia this duty would have amounted to 2,03 million. For his sales of fruit and vegetables in Montenegro, where the VAT rate for these products is 21 percent, he paid 3,97 million euros in this tax, while in Croatia, where the tax is five percent on this volume of sales, this duty would have amounted to 1,09 million euros.
He stated that last year he paid a total of 70,2 million euros in VAT, excise duties and customs duties, and if duties on cigarettes and alcohol, which are similar, are excluded, the sum amounts to 59,7 million euros.
"On this turnover of goods in Croatia, when cigarettes and alcohol are excluded, we would pay duties of 51,5 million euros, or 8,2 million euros less or 16,06 percent less," Bokan said.
Additional excise duties and customs duties on nine thousand items
He said that "Voli" has 22 thousand items on sale, and that 8.951, which make up 49 percent of turnover, are additionally burdened with excise duties and customs duties. Excise duties exist for 6.498 items, and additional customs duties for 4.506, which means that about two thousand are additionally burdened with excise duties and customs duties. He stated that all these additional duties make up the price base, which is later increased by percentages of margins and VAT.
The list shows that these additional duties do not only apply to alcohol and cigarettes. Additional duties are calculated on 916 items from the milk, dairy products and eggs group, namely 90 excise duties and 907 customs duties, or about 80 products have both levies at the same time.
Additional taxes are also levied on 158 items from the fruit and vegetable group, 422 items from cured meat products, 152 from the basic food group, 330 products from the canned meat and fish group, 384 products from the frozen product program, 386 items from the furniture group... and the Government has even introduced excise taxes on 15 items from the baby product program.
Bokan cited the example of an import duty of 15 percent on imported cheeses and cheese spreads, as well as on canned sardines, while on pâtés and canned tuna it is 10 percent. He also said that an excise duty of 25 cents per liter has been introduced on carbonated and non-carbonated juices, energy drinks and syrups, and for chocolates, cream spreads, candies, chewing gums, chocolate boxes, ice creams... 50 cents per kilogram. These duties and excise duties do not exist in Croatia.
The purpose of import duties of 10 to 30 percent is to formally protect domestic production, but they also exist on items that are not available in Montenegro, while additional excise taxes on items containing sugar were introduced with the explanation that it protects the health of residents.
Bokan believes that this is just an explanation, while in reality they are used to fill the budget.
If traffic decreases, margins will increase
He also stated that from 2012 to 2023, "Voli" invested 142 million euros in its markets and production facilities, last year it invested 17 million, and in the next two years it will invest another 57 million euros.
"In other words, we reinvested our profits in the amount of 200 million, of which the state earned at least 50 million," said Bokan.
He stated that the state did reduce taxes on wages, but they also had to increase wages, so the gross amount for wages in 2022 was 21,2 million euros, and in 2024 that cost was 29 million.
"How do you think someone invests in a company, repays loans and increases salaries, without making a profit. If they were to reduce the margin by three percent, they wouldn't be able to do that. If the boycott causes a drop in turnover, we will have to increase margins, that's the only way," said Bokan.
He also said that he can't wait for Lidl to arrive so that it can be seen that its prices are no lower than the others, and asked why state officials are patronizing foreign, rather than domestic, markets.
Đeljošaj: Boycott will bring nothing to anyone
Deputy Prime Minister and Minister of Economic Development Nik Đeljošaj said that he is against a boycott of retail chains because nothing will be gained from it, and the economy and domestic production will be jeopardized.
When asked whether he would propose reducing duties, he said that he supports increasing duties on harmful products such as sweets and carbonated drinks, even though this has led to an increase in their prices, but that a possible reduction in VAT on basic groceries, fruit and vegetables, and fish should be analyzed.
He also stated that the media should not broadcast populist statements about the boycott, but rather analyses by experts and institutions.
The president of the Food and Agricultural Industry Board, Milutin Đuranović, said he was against the boycott because it would hurt domestic producers.
"We import most of our food and with it we import price increases. Why do we have the cheapest electricity, because it is a product. If we had to import it too, it would be more expensive," said Đuranović.
Bokan: I would make an offer for 'Plantaže' if it were for sale
When asked whether he planned to buy "Plantaže", Bokan said that he would make an offer if it were for sale.
"But I don't think that will happen until they hit rock bottom. We buy 8,6 million euros worth of products from 'Plantaže' every year, and everything is paid in advance. Through our markets, they sell 62 percent of their total turnover in Montenegro. Ask them how many times we have helped them with advances to avoid blockages and payment of earnings. If someone asked me, I would privatize the factory and production, and they would pay a concession for the land. I think that 'Plantaže' can become a successful company with good management and investments," said Bokan.
In response to questions regarding BC "Budućnost", he said that over 14 million euros have been invested in that club over the 20 years of partnership and that he is proud of that club.
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