Dark clouds hang over Slovakia's poultry industry

Hydina Slovensko, a well-known Slovak poultry processor, is on the verge of bankruptcy due to a large debt of 23 million euros, reports local publication Hospodárske noviny. This case may indicate big problems for the entire poultry industry, which faces painful changes.

The company has struggled with financial problems in recent years. The company recorded a staggering net loss of €4 million in 2022, its worst performance to date. The company, which has been in business since 2009, has been in the red since 2019, a trend that has only worsened over time.

Local press reported that the company's problems may be partly related to the upcoming ban on the sale of eggs from cage farms, which is due to come into force in 2025.

Daniel Molnár, DIRECTOR of the Slovak Poultry Farmers' Union, explained that major European retail chains have notified their Slovak partners that they will no longer accept eggs from cage-free farms from next year.

The Slovak poultry industry is in dire need of government support of €65 million. Farmers say this financial injection is critical to easing the transition to free-range production. However, the prospects for a call for that money remain uncertain, with businesses warning of a potential wave of bankruptcies in the coming months if funds for the transition are not secured.

Molnar also said that poultry farmers are extremely concerned about possible fraud in the labeling of eggs from other EU countries . He explained that as far as Slovak farmers are concerned, the transition to free-range production in other European countries has been slow, so it is not entirely clear how the new standards will be met.

The need to finance the transition comes at a time when Slovak poultry farmers are experiencing a long-term cost crisis . Molnar said farmers' costs have risen across the board over the past two years, with electricity and gas costs through the roof.

“In 2023, we also saw significant increases in packaging materials prices, increases in fuel prices, as well as increases in labor costs due to rising inflation,” he explained.