Over the past four years, Serbia’s potato processing and canning industry has seen profits collapse from 32.8 million dinars in 2021 to a loss of 419,000 dinars. Analysts cite several key reasons for the decline.
High production costs are a major factor, with cultivation expenses reaching up to €5,000 per hectare. Rising prices for fuel, fertilizers, and energy further strain farmers and processors. Storage losses are also significant, with 70,000–80,000 tons of potatoes spoiling annually due to inadequate warehouses.
Import competition worsens the situation. Domestic fries, costing around 200 dinars per kilogram, struggle to compete with imported fries sold for approximately 155 dinars. Serbia imports 12,000–15,000 tons of processed potatoes annually because domestic production cannot meet demand.
Climate change, crop diseases, pests, and fragmented small-scale farms (average 4–5 hectares) further hinder production efficiency. High trading margins and the dominance of large retail chains make it difficult for domestic processors to secure shelf space. State subsidies are also much lower than in the EU, limiting competitiveness.
Agroanalyst Branislav Gulan emphasizes that improvements require modernizing warehouses, organizing producers into cooperatives, increasing state support, and protecting the domestic market from aggressive imports. Without these measures, local processors will continue to lose out to stronger, more organized international competitors.
Currently, 18 companies operate in Serbia’s potato processing sector. Despite challenges, some enterprises are thriving:
- Tanja Gavrilović (Guča) leads with a 2024 profit of 2,679,000 dinars, up from 1,785,000 dinars in 2023.
- Chips Way (Čačak) reported 1,804,000 dinars in profit and exports to over 10 European markets.
- Pet Fries (Kać) achieved 592,000 dinars in profit, nearly doubling its 2023 earnings, thanks to modernized production lines and automated storage for frozen French fries.
While the sector faces systemic challenges, successful family-run and export-oriented companies demonstrate that profitability is possible with modern production practices, local sourcing, and careful management.
