Business News

Sale of Droga Kolinska Stirs Political Controversy

Ljubljana, 01 July (STA) - The announcement of the sale of Slovenia's no. 1 food company, Droga Kolinska, to Croatian company Adriatic Grupa is stirring controversy in political circles, with most representatives of parliamentary parties voicing disappointment with the decision to sell a showpiece of Slovenia's economy to a foreign buyer.

The decision by the debt-ridden Istrabenz holding to sell Droga Kolinska to Adriatic Grupa appears to have caught many parliamentary representatives off guard. Many voiced disappointment on Thursday, saying that such an important part of Slovenia's agricultural and food industry should have been kept in Slovenian hands.

Also weighing in on the debate prompted by Thursday's announcement of the sale is former Istrabenz chairman Igor Bavcar, who placed the blame for the sale on politicians. This is the price that has to be paid for political wheeling and dealing regarding the fate of Istrabenz, Bavcar told the STA.

According to him, Istrabenz could have been salvaged through a voluntary debt restructuring plan but was instead forced into court-mandated restructuring late last year. Political influence on banks made them opt for the latter, which is why investments such as Droga Kolinska are now being sold off, he explained his take on the matter.

Bavcar, who headed Istrabenz from June 2002 to his ousting under pressure from banks last year, also hailed his role in merging Droga and Kolinska into a single company that was subsequently brought under the umbrella of Istrabenz in 2006. The outcome of this process was an "excellent international company with respected brand names".

But Bavcar's view about political meddling was rebuffed by a representative of the junior coalition Zares party, who said the sale was brought about by the troubles of Istrabenz. "What happened to what was once a healthy company is reason for concern," Cveta Zalokar Orazem said in a reference to Istrabenz's trouble with debts.

Zalokar Orazem added that the sale should be viewed from the perspective of Droga Kolinska's future. "If the sale results in synergies and the intentions are good and proper, this may not be a disaster."

Other parliamentary parties were unanimous in voicing concern about the sale.

"Given that we're talking about the food-processing industry, this decision should have been given extra thought," Janko Veber of the ruling SocDems told the STA. He said the only justification for a sale to a foreign company was the expansion of the market.

LibDems MP Borut Sajovic said he was disappointed by the sale because Droga Kolinska was "one of the pride and joys of Slovenian business".

"I'm saddened that a buyer could not be found in Slovenia for this important company. I think this would surely have been in Slovenia's national interest," added Sajovic.

Andrej Vizjak of the opposition Democrats (SDS) rued the "loss of one of the rare brand names whose importance stretches beyond Slovenia's borders".

Fellow opposition People's Party (SLS) echoed this view calling the announcement "bad news". "I think that Slovenia should work to keep its food-processing industry in its hands," MP Jakob Presecnik said.

The hardline National Party (SNS) was even more critical, with its leader Zmago Jelincic calling the sale a "crime". He attributed the sale to the will of the government, saying that it did not care about national pride.

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