Producers of soft drinks and bottled water create more than BGN 266 million in added value per year

In addition, they invest nearly BGN 411 million in local resources, according to a study prepared by the Institute of Market Economics for the Association of Soft Drink Producers.

Sofia, May 30, 2022 – Companies producing soft drinks and bottled water create an added value of more than BGN 266 million per year. This represents almost 46% of the value added in the production of all types of beverages, about 10% of the value added in the whole food industry, 1.6% in the processing industry and 0, 3% of the gross added value in the national economy of Bulgaria. This is reported in the first study of its kind, presented today on the socio-economic impact of the non-alcoholic industry on the Bulgarian economy, prepared by the Institute of Market Economy, for the Association of soft drink producers. The survey should be updated regularly, aiming to provide an up-to-date picture of key indicators of the state and dynamics of the sector, as well as to analyze the companies’ overall impact on related industries and the economy. .

“Companies in our industry provide almost 4,700 jobs, which represents 5% of total employment in the food industry, 0.9% of employment in manufacturing industry nationwide and 0 .2% of employees in the whole Bulgarian economy. But our contribution should not be seen only as privileged employers – for every BGN 10 spent on soft drinks by the end user, our industry generates revenue in companies engaged in trade, distribution and public catering, s ‘amounting to BGN 3.49, the costs of raw materials produced in Bulgaria for BGN 1.30, various local services of Bulgarian partners for the amount of BGN 0.79, the disposable income of households working in industry of 0, 42 BGN and investments made by Bulgarian entrepreneurs for 0.20 BGN. At the same time, Bulgarian companies generate profits of BGN 0.62, pay BGN 0.08 in corporate tax, social security and income tax of BGN 0.22, and make sales in commercial and tourist sites also contributes to VAT revenue in the amount of BGN 1.27, said Jana Velichkova, executive director, Soft Drink Producers Association.

“The production of soft drinks has both direct effects on other economic activities of the Bulgarian economy – in the supply of local raw materials, various services, including transport, distribution and marketing – and additional (indirect) effects, which result in increased demand for goods and services along the value chain for each of the suppliers and partners. Thus, the impact is multiplied in related industries and the “spillovers” lead to increased income and employment in many companies,” added Lachezar Bogdanov, Chief Economist, Institute of Market Economy.

The study indicates that the soft drinks and bottled water industry also invests in local resources totaling almost BGN 411 million, including around BGN 205 million for raw materials from Bulgarian producers, various external services from Bulgarian partners for approximately BGN 125 million, as well as deliveries. equipment and construction activities related to the investment process for more than BGN 30 million. Companies in the branch provide employees with a net income of almost BGN 51 million and at the same time pay income tax and social security contributions amounting to more than BGN 35 million and taxes on companies in the amount of approximately BGN 12 million. The indirect effect of corporate taxes paid and insurance tax on employee income, through additional economic activity in value chain partners and suppliers, is estimated at BGN 106 million. This is equivalent to 0.43% of the country’s total tax revenue, or the annual child support of more than 75,000 high school students. At the same time, the consumption of soft drinks in the country generates nearly BGN 200 million in additional value added tax, paid by end customers.

Sales of soft drinks and bottled water in the Bulgarian market directly generate almost BGN 548 million in revenue from logistics, distribution and sales. Throughout the value chain and related activities, this effect is multiplied by a secondary effect for suppliers and partners related to the production of BGN 310 million and a secondary effect for suppliers and partners related to distribution and sales of BGN 320 million. The strongest effect on the value chain is observed in the sectors of production of processed and preserved fruits, syrups, semi-finished products, sugar, glucose syrups and sweeteners, plastic packaging plastic, glass packaging, labels and other paper products, production and repair of specialized machinery and equipment, including transportation and other business services.

For the purposes of the study, industry reported data for 2019 was used, when 187 companies with the main activity “Production of soft drinks, mineral waters and other bottled waters” operate in Bulgaria. There were 14 medium and large enterprises, which generated more than 87% of the sector’s total turnover and 91% of the added value. According to data from the Association of Producers of Soft Drinks in Bulgaria, at that time 1757 million liters of drinks were produced in Bulgaria, of which almost 47% was bottled water. According to data from the public registers of the Ministry of Health and the Bulgarian Food Safety Agency, production was carried out at more than 150 sites in the country. During the reporting period, companies producing soft drinks and bottled water generated sales revenue of more than BGN 810 million. This represents almost 44% of the income of companies producing all types of beverages, about 6.3% of the income of food and beverage producers in the country and 1.2% of the income of the processing industry in Bulgaria.

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