Lower quality branded food being sold in Eastern Europe than in the West

Some international brands have been accused of supplying lower quality products in Eastern Europe than in Western Europe, leading to a lack of trust in brand claims.

With media and politicians spending a growing amount of time investigating claims of duplicity, international brands need to be transparent and invest in rebuilding trust or face being caught up in a scandal that threatens their ability to sell in this rapidly growing region.

The European Union was notified

Last year Věra Jourová, a senior European commissioner of Czech origin, accused several multinational food and drink companies of having misled shoppers in Eastern Europe for years by selling them inferior versions of well-known brands.

From fruit drinks and cola to fish fingers and luncheon meats, Eastern European versions of brands have been found to be inferior in quality to those sold in the West, while in many cases they are presented in the same branding and packaging.

Adapting to the local market?

The most common reason noted by manufacturers has been that they are adapting their products to suit local tastes. However, tests have revealed that a certain brand of chocolate spread in Hungary, for example, contained less cocoa than the same product in Germany, and fish sticks in the Czech Republic had less fish – facts that cannot be explained with consumer taste preferences.

Some brands improved products but consumers feel offended

It has to be noted that some of the brands have already addressed the issue. One example is baby food brand Hipp, which was found to be inferior as well as more than 50% more expensive in Croatia compared to the same product sold in Germany.  The recipe, which was found not to contain omega-3 oil, was changed to have a ‘97% similarity’ to the German version, with the company stating that the Croatian version is now on sale in Germany.

Although, voluntarily or under pressure from the EU, brands have started taking steps to unify their ranges across Europe, Eastern Europeans are already tired of being served inferior products. Many consumers feel offended by what Bulgaria’s prime minister has reportedly called ‘food apartheid’.

Even if the differences are being addressed, mistrust towards international brands is likely to be a long-term problem. Some brands could find themselves boycotted if they continue to sell inferior products to consumers in Eastern Europe.

People, including Eastern Europeans, are sceptical of the intentions and values of big companies. If they are unable to obtain high-quality products, assuming that they originate from a renowned brand, many would rather opt for not buying this brand at all. In the past, boycotting has been easier for consumers in advanced economies as they have had greater access to a variety of products, meaning they could easily find alternative brands.

Bright future for economies in Central and Eastern Europe

However, Central and Eastern Europe are currently experiencing strong economic growth and expectations for 2018 are even brighter. Unemployment rates in Poland, Czech Republic and Romania are all below the European average and at their all-time low, and labour costs have risen in 2017 far more in the region than in the EU overall. Logically, this situation will stimulate local production of high-quality goods, which consumers might find safer and more enjoyable.

Mistrust towards leading brands will lead to upsurge in localism

Trust is a particularly important factor in the region: according to a GlobalData 2015 survey, 66% of consumers in emerging economies stick to products they know and trust, compared to a lower ratio of 61% in developed economies. Consequently, mistrust will be a serious issue for international brands marketing their products in Eastern Europe, especially because the lack of trust is combined with a strong trend for locally made products. This trend came about together with the hipster movement and manifests as an increased interest towards heritage.

International brands need to work towards rebuilding trust with their consumers in Eastern Europe or they are destined to lose out in the long term from an increasingly affluent market.