From political rhetoric, the issue of European integration has begun to enter the phase of assessments for meeting safety conditions. The first to pass the test are 904 food product operators.

With a list of tasks in hand, the National Food Authority (AKU) inspectors are knocking on every door to every business to provide assessments of compliance with the standards required by the European Union (EU).

As for businesses, the challenge of resolving the most difficult economic exercise of these 30 years of transition has begun. After the assessment made by the NFA, businesses are being classified into 4 categories (from Class I to Class IV). The assessment process will end on July 31, 2026.

In the dairy processing sector, among the first to be evaluated, processors' fear is the repetition of the Bulgarian model.

During Bulgaria's EU accession process, in 2005-2009, around 60 to 70% of small dairy processing businesses closed. Their exit from the market came after they failed to adapt to EU standards in the areas of food safety, technological innovation and the environment.

Taulant Pupa, director of the milk processing company "Vita 2001", believes that the Bulgarian model is the main reference for how the integration process in the dairy sector in Albania will be built.

He claims that the biggest problem is not the lack of standards in production technology or traceability of dairy products, but in the treatment of waste and wastewater within factories and dairies.

"Our company, for years, - for the investments made that have enabled the fulfillment of standards for the production of dairy products according to EU requirements -, has had the Bulgarian model as a reference. During the integration process in this country, there were massive closures of milk processing companies, especially small dairies.

And one of the EU's strongest requirements at the time was to meet environmental criteria, for the treatment of wastewater and waste to avoid cross-contamination in production.

It is feasible, but only if the right technology is invested in and the cost is met. This will be the main cause that could lead to the bankruptcy of many businesses in the country, including structures consolidated in technology and traceability that do not meet the condition for waste treatment.

Mr. Pupa estimates that the cost of meeting the environmental standard is high, especially for small dairies and factories, which will be required as an immediate investment and not implemented gradually over the years.

"The cost of setting up a plant that processes dairy industry waste in a dairy costs about 80 thousand euros, while for a large factory, up to 600 thousand euros. For many small businesses, these investments are practically unaffordable. A dairy cannot afford these costs.

"I think the state should intervene here for investments and help dairies that employ people, so that they don't close."

AKU, food safety assessments, businesses are being categorized into 4 Classes

For about 4 months, the National Food Authority (AKU) inspectors will assess 904 food operators for compliance with food safety standards as required by the European Union.

The Director of the National Food Authority, Blerina Gjylameti, in an interview with "Monitor" explains that the assessment began on April 14 and has so far been completed for 225 businesses.

"The assessment and categorization procedure began on April 14 and will continue until July 31, 2026. The purpose of the categorization process is to identify facilities that are in compliance with legal requirements:

(Category 1) – Establishments that are found to be in full compliance with EU standards. (Categories 2, 3 and 4) – The classification into subcategories will serve to determine the level and extent of non-compliance. On the other hand, the resources and timeframe needed to manage and correct the identified issues should be calculated, as well as the procedures to be followed for the implementation and monitoring of the improvement process.

Compliance with food safety requirements, according to the legislation in force, is mandatory regardless of the categorization result, and in cases where it is determined that a food poses a risk to consumer health, immediate measures will be taken by the assessment bodies.

An inspection procedure will be initiated immediately with the aim of preventing the placing of harmful products on the market.

Category 1: classified establishments that operate in full compliance with EU requirements.

Category 2: classified establishments where minor non-conformities are observed that can be resolved over a short period of time (3-6 months).

Category 3: facilities are classified where significant non-conformities are noted (related to layout, building infrastructure, which require further works or renovations and significant financial resources or facilities that have been de-categorized from category 2) that can be improved over a longer period of time than that of category 2.

Action plans will be prepared for these facilities to correct non-compliances at a later stage.

Category 4: establishments are classified where major non-compliances are observed and the establishment: poses a significant risk to health; must not place products on the market; must be closed because it is not in compliance with national legislation; cannot meet EU standards. For category 4, the NFA takes measures to close the establishment.

Ms. Gjylameti emphasized that in addition to the assessment, the inspectors are also providing detailed instructions for improving the situation, in cases where some of the standards are found to be unfulfilled. The maximum deadline for improvements is up to one year.

At the end of the process, where the NFA will also have a clearer picture of the food security situation, a National Strategy is expected to be drafted, which according to Ms. Gjylameti will be aimed at solving problems.

"The assessment and categorization are carried out through the use of checklists, personalized according to the specific activities of the food establishments. The checklist will be supplemented with comments in each section, regardless of whether non-conformities have been identified or not. Thus, guiding the OBUs on the measures they should take to improve the establishments.

Once we have the full results, at a later stage, action plans will be prepared for category 3 establishments to correct non-compliances. The NFA relies on the technical expertise of GIZ and the EUforFoodSafety project, which are assisting in the harmonisation of procedures, increasing standards, capacities and information”, emphasized Ms. Gjylameti.

Based on the experience of the assessment of the company "Lufra", Luis Ndreka explains in detail for "Monitor" how the AKU is acting with the assessments for the fulfillment of EU standards. "The control system that the AKU is developing is quite rigorous. Inspectors are equipped with a 'check list'.

After the assessments, businesses are categorized into four classes. “Class I” categorizes companies that can sell immediately in the European Union. In Albania, excluding the sector of animal origin products, exporters are categorized into 'Class I'.

Until now, due to the lack of legislative approximation, domestic companies of animal origin products do not export to European Union countries. But this does not mean that they offer unsafe food products, as they export to many other countries, including the USA.

'Class II' is categorising companies that encounter minor problems, but which can be resolved within 3 months. 'Class III' is classifying companies that must meet standards through investments lasting more than 3 months.

"Class IV" categorizes businesses that do not meet safety standards not only for the EU market, but also for the domestic market. This has led to their immediate closure by the AKU."

The control process will not be limited to Albanian institutions. After the first phase, inspection teams from the EU will also arrive in the country for risk-based verifications.

"The assessments are being carried out by a regional body of inspectors, and will subsequently be inspected by the central body. For example, if a company is categorized as 'Class II' and the central body classifies it as 'Class III', the assessment will start over for the entire group of businesses that this regional body has assessed."

"The same procedure will be followed by the EU inspection bodies. On a risk basis, they will check the NFA assessments on the ground," he says.

For the vast majority of companies in the sector, Mr. Ndreka says that the first phase is being considered as an exercise to assess the situation that serves not only business leaders, but also state institutions themselves. A clear identification of the situation, according to him, will also serve to benefit from aid funds that can be provided by the EU in support of the manufacturing sectors.

On the other hand, according to preliminary data from the Dairy Processing Industry Association, 10 to 15% of milk processing sector entities are classified as “Class IV”, which means that they do not even meet the safety standards to trade in the country. As a result, these businesses, mainly small dairies, have been closed by the NFA.

Only 10–15% of businesses are considered prepared

As Albania has entered the concrete phase of the assessment, the Albanian Producers' Association (BPSH) and the Albanian Agribusiness Council (KASH) raise the alarm about the low level of Albanian businesses that have declared that they are prepared with EU standards.

The Secretary General of the BPSH, Mr. Arben Shkodra, explains that in order to survive, it will be mandatory for all operators to transform to adapt standards, including those for food safety, production technology, the traceability system they implement, environmental protection, employment certifications, etc.

But at this stage, according to him, most businesses have neither the information nor the financial capacity to carry out the transformation that EU integration requires.

"Based on a preliminary analysis conducted by the Ministry of Economy, according to self-declarations of businesses, it results that about 10 to 15% of them are relatively prepared to be part of the European Union.

"It results in another category that includes companies that have problems, but they can be solved. And there is another category that includes the largest number of businesses that do not meet any technical standards to be part of the European market, but that also have no idea how to meet them."

Mr. Shkodra says that from the first certification process, the sector most affected will be industrial food processing.

"From an analysis by the Ministry of Economy, but also from assessments conducted long ago on the ground by business associations, we judge that the sector that will be most affected by the first process of assessment and certification of EU standards will be the branches of the industrial food processing subsector.

Including sectors such as: alcoholic and non-alcoholic beverages, food products that are produced, traded and processed from fruits, vegetables, olive oil, pastries, meat and its by-products, fish, etc.

Currently, the EU's main focus is on identifying and assessing all sectors and subsectors of the food industry, with the aim of integrating them within economic standards and guaranteeing food safety for the European consumer.

We estimate that even the non-food industrial processing subsectors will have many problems. The construction sector will pass through a very dense EU filter, as it must be guaranteed that not only the materials used are based on Eurocodes, but also the construction process on the construction site is carried out according to very strict rules.

Consequently, all Albanian companies must begin work on meeting the standards.

There are two main sentences in integration: achieving competitiveness and transformation. Without transformation, competitiveness cannot be achieved.

Cost invoice

The first questions regarding whether or not the costs can be covered arise from the analyses of business associations.

For the Association of Albanian Producers' Unions, according to Arben Shkodra, the biggest problem comes from the way the structure of the Albanian economy is built, dominated by small businesses that automatically increase the degree of financial inability to meet costs.

"Looking at the structure of enterprises in the country, where 99% of companies are microenterprises, 1 to 2% are small and medium-sized companies, 98% of businesses do not have real monetary opportunities and capacities to make the transformation, in order to achieve competitiveness and survival in the market," he states.

In the Southeast area, according to NFA estimates, 3 dairies have been closed so far. According to market sources, the closed dairies operated in primitive conditions.

Taulant Pupa, who runs the "Vita 2001" milk processing factory, present on the market for two decades, based on a financial analysis for his company, estimates that the cost of meeting standards is high.

Despite the cost, Mr. Pupa emphasizes that he remains committed to investing in meeting the required standards, as he will continue to remain in the market.

But he estimates that both the costs and the allowed time to meet the conditions (the maximum is up to 1 year) cannot be afforded by small businesses.

"The costs and the allowed timeframe for additional investments will only be affordable by companies that have continuously invested in consolidation since 2000."

"On the contrary, a factory or a dairy that will seek to re-enter the market will find it impossible to meet the standards. It will take at least 3 to 4 years."

Leaders of manufacturing business associations, as well as entrepreneurs themselves, are still unclear whether they will receive assistance from the state and the EU to cover investment costs.

Even the president of the Albanian Exporters Association, Alban Zusi, is unclear about the sharing of costs. Another concern for him is the short 12-month deadline left to meet food safety standards, which is creating great pressure on businesses in the agri-food sector, as even entities that produce safe products will have to make costly investments to meet the new standards.

"Requirements to meet European Union food safety standards within a 12-month period are putting enormous pressure on businesses."

Even entities that produce safe products will face the obligation to meet standards that require significant investments and additional operating costs after the investment.

So far, it has been implied that these investments should be covered by businesses themselves. In conditions where enterprises are losing ground in competitiveness every day, they are forced to use the remaining energy and funds for investments related to meeting standards and not directly to increasing competitiveness or survival in the market.

Mr. Zusi also raised concerns about competition from informal businesses in the domestic market, emphasizing that regular and standard businesses are facing additional costs, while informality continues to be a problem.

He warned that many businesses are reassessing the future of their activity due to increasing pressure and uncertainties in the market.

"Even investments that will be made within 12 months do not automatically guarantee entry into European markets. Meanwhile, in the domestic market, regular and standard businesses are facing competition from informal entities."

Under these conditions, the increase in standards requirements is increasing pressure on enterprises, causing many of them to reassess the future of their activity and how they will continue to operate in the market or seek to exit the market.

Investment lending risk

Agim Rrapaj, from MTEF, says that investments will be covered by businesses through lending to some of the programs announced by the government.

Information about mandatory EU standards for Albanian agricultural businesses has begun to be provided, but there is a lack of awareness for immediate action to decide and act without wasting time to improve technology.

The funds that will be used for this process can be found through several sources such as: a loan with concessional terms of 250 million euros, with an interest rate of 2%, accompanied by a Sovereign Guarantee of 30 million euros, which the Albanian government has granted to those entities that do not meet the collateral required by second-tier banks; Grant for the national support scheme for agriculture and rural development of 52 million euros; IPARD III program grant of 146 million euros; Loans from the Albanian Development Bank and from second-tier banks; Funds from the financial activity of the entities themselves; Funds from several pilot projects financed by donors such as GIZ, WB, EBRD, EIB, etc.

Luis Ndreka also says that businesses that seek to survive will have to take the risk of lending for investments.

"In my opinion, there are two paths for businesses: either they should decide to meet the required standards and invest, taking on the risk of lending, or they should decide not to do this. I think most businesses in the sector have the right experience and will aim to move forward."

Challenges of the agricultural sector

The head of the MTEF, Agim Rrapaj, emphasizes that the integration process cannot be seen in isolation from the complete food production chain, starting from the farmer to the final consumer.

According to him, the challenge lies not only with factories or dairies, but with the entire structure of agricultural production in the country.

"There are 354 thousand producers of agricultural and livestock products in the country, who have land to produce. Of this total, today about 110 thousand have the right to market their products according to the criteria that the country has. So they are entities equipped with NIPT, including farmers, fishermen, inns and agro-processors who produce for the market.

All these businesses should be grouped into service units and organized as production organizations, collaborating on models like those of Switzerland, Japan, Israel, Italy, etc., in order to meet the criteria for certification of standards according to the EU.

From the first assessments, carried out through field verifications in businesses such as: slaughterhouses, milk processors (factories and dairies), hostels, as well as in the agro-processing sector (preserving chopped vegetables, canned goods, foods of livestock origin), recommendations have been given, mainly for improving standards for waste disposal in slaughterhouses.

Recommendations to hostels have focused on improving fire protection systems. Many of them have resulted in small windows, which increase the risk to life in the event of a fire.

There are also about 300-400 exporting entities, including collection and export centers that meet food safety requirements according to EU standards. This group may also have problems that need to be improved, but they can afford the investment cost to meet these standards.

The head of the MTEF says that meeting the standards is an obligation for all businesses that want to remain in the market. Mr. Rrapaj adds that businesses should start working on meeting them, so as not to risk exiting the market.

Deadlines and consequences for businesses

The Association of Albanian Manufacturers says that the realistic period that businesses have to adapt to EU standards is about 3 years. After membership, these standards will be a legal obligation.

In case of failure to meet the requirements, businesses will not be allowed to trade in either the Albanian or European market, risking closure or bankruptcy.

"Businesses still have about three years and the Albanian economy has the opportunity to save a significant part of them, making them worthy of the European market. Otherwise, companies that do not meet the standards will exit the market."

The market will not remain empty, it will be replaced by other European companies, bringing both strong competition in the domestic market, but also the new economic 'conquest' of the country", emphasized Arben Shkodra.

In conclusion, business associations warn that European integration is not simply a political objective, but a new economic reality, where only those businesses that manage to adapt to new market standards and bear the costs of transformation will survive./ Monitor