Serbia: Russian embargo "no good for anybody", says Apple World founder
While Serbian produce exports to Russia have risen substantially since the country's import ban on the EU, one grower says he'd rather have a level playing field.
After 20 years in the electricity business, Pavle Bajkovic made the move into agriculture in 2011 with the formation of Apple World, and since then he has invested €25 million (US$28.3 million) in a modern orchard close to the Hungarian border.
With such a large amount of capital put into the operation, the entrepreneur says any privileges gained with Russian market access are offset by the low-price environment in the EU.
"This is no good for anybody. In the end we are going to end up with levels less than last year, because there is a lot of smuggling going on from Belarus or wherever. I don't know where the goods are coming from," he says.
"Everybody is selling for just a lower price level – in Russia we have this relationship of tax exemption but we are not benefiting from it.
"This is an issue that gives nobody an advantage. For me, I like to be on a level playing field. I made this business to supply the European chains, and now I am selling at a lower price level than last year."
He estimates it will take him a decade to make back the money he invested in the business.
Bajkovic's business model is based on direct sales of premium product to supermarkets, with destinations including Macedonia, Greece, Denmark, England, Italy and Russia. The executive says his orchard is one of the most technologically advanced in Europe, with good conditions at a similar latitude to South Tyrol.
"We have a good difference between day and night temperature, and that's what gives the apples more crunchiness," he says.
"We take care of the environment, we follow GlobalG.A.P. standards and so on, and we use technology in order to spray less and produce better quality. We have a frost protection system, drip irrigation and sensors inside the field."
Around 60% of the orchard is dedicated to Granny Smith and Golden Delicious varieties with a 50-50 split, along with a further 20% of the crop comprising Galas. The rest of the farm is focused on Fujis and some club varieties like Crimson Snow.
"Crimson Snow is a new club variety, we are just starting to sell it. It's a late variety between Fuji and Pink Lady, and has the best shelf life in the world; you can keep it for 40 days at room temperature. It won't change the form, shape or taste, and the longer it stays on the tree, it tastes even better.
"We are focusing now on club varieties; not only Crimson but Kanzi too. We are focusing this year on starting negotiations with them, and are planning to plant more varieties this year. At the moment less than 5% of our apples are club varieties.
"In terms of volume, Serbia doesn't have the volume even to supply Moscow City, let alone Russia. As a country we are building every year with 500-600 hectares of apples only, so in terms of five years there's going to be a huge volume of Serbian apples coming on, and of good quality. I'm not talking about old orchards which are problematic.