site.btaShadow Sector Accounts for 90% of Bulgarian Rose Industry Output

Shadow Sector Accounts for 90% of Bulgarian Rose Industry Output

Sofia, February 1 (Lyudmila Spassova of BTA) - The year 2015 was disastrous for the Bulgarian rose industry as the amount of the crop was 60 per cent below the normal level, sinking to a 30-40-year bottom, Bulgarian Rose Oil Association President Filip Lissicharov said in a BTA interview.

By contrast, 2014 was a wonderful year for the sector, the best one in three decades, but it could not make up for the slump in 2015, Lissicharov said. It is too early to make predictions for 2016 because the crucial month of April is still ahead. The rose plants look well for now and there is hope, he added.

According to the expert, informal businesses and the indifference of the government are the main setbacks hindering the rose industry's development. The shadow sector accounts for 90 per cent of the total output. Nearly 99 per cent of the products on the domestic market which are labelled as Bulgarian rose products are in fact mere chemicals, he said.

The shadow sector still produces rose oil, albeit of somewhat lower quality - the main difference is that it does not issue invoices for the sales, Lissicharov said. He noted that Bulgaria lacks basic regulations for control of the rose industry output.

What is needed is not necessarily a special law but a special approach on the part of the government, he argued. One problem is that foreign companies run production ventures in Bulgaria to take advantage of the low taxes - they reap benefits and build a good international image for themselves without creating jobs or bringing any other advantages for the country. Speculative practices are rampant in May and June. Speculators make profit at the expense of farmers and processors. There are only between five and 10 genuine operational companies in the Bulgarian rose industry, all else is fake, Lissicharov said.

It took 10 years to earn a protected geographical indication (PGI) for Bulgarian rose oil, but this has not helped in any way, he said. Local businesses are trying to expand into foreign markets because it is there that PGI really matters.

The biggest difficulty has to do with rose harvesting. The government is failing to understand that one-day employment agreements are unfeasible in the sector. Rose harvesting requires tens of thousands of workers to be employed for 20 days' work because the period in which the flowers can be picked is very limited. Simply getting so many people to do this kind of job is a very big problem, not to mention signing employment agreements with them, Lissicharov explained.

Meetings between producers and the government have been unproductive, he said. The Bulgarian rose industry is so small that a Chinese or Japanese company could buy all of it in one go. The industry's annual sales range between 20 and 30 million euro, which is nothing for an international company, he said.

Lissicharov observed that the rose is a unique product which is appreciated in France, Japan and the United States but not in Bulgaria, although Bulgaria is known as "the land of roses." It is a very difficult product to process because it contains over 330 chemical components but only 20 of them can be detected by gas chromatographic analysis, the rest are in very small quantities. There are skilled "magicians" in Bulgaria who can fake the product, the expert said.

Only 0.1 per cent of the rose oil made in Bulgaria remains in the country, the rest is exported mainly to France, Japan, Taiwan, Korea, China and the United States. Major European markets also include Germany and Switzerland, Lissicharov said.

Turkey is another well-known producer of rose oil but the kind which is made in Bulgaria is better due to the climate. Bulgarian rose oil is unique and should not be left to die out, Lissicharov said.