STA, 4 December 2020 - Slovenia's major beverage companies are no exception when it comes to the devastating impact of the pandemic on the industry worldwide. Some companies have recorded a major drop in sales in the second Covid-19 wave, particularly due to the hospitality sector lockdown.

Retail demand has increased due to the closure of hotels, restaurants and bars, however the drinks companies do not believe that this uptick could offset or significantly mitigate the overall contraction.

Slovenian brewers, including the country's largest beer maker Pivovarna Laško Union, have been experiencing the ramifications of anti-coronavirus restrictions since beer consumption largely depends on socialising.

An estimate by the Association of Slovenian Brewers shows that some 38,000 jobs are at risk due to the closure of restaurants, bars, pubs and cafes.

There is a silver lining - online shopping trends, which are expected to continue to point up.

Nevertheless, the situation is expected to remain precarious in the coming months, Pivovarna Laško Union has told the STA.

The Slovenian beer sector estimates that domestic sales of individual producers may drop by at least 30%, some may even experience a 95% contraction of sales.

Mineral water producer Radenska has told the STA that hospitality sector sales had ground to a halt during the second wave.

The wine sector is seeing similar problems. The winery Vina Koper told the STA that most of its plans had to be pushed back. After stabilising operations between May and September, it faces a challenging period, a season deemed vital for the sector.

The winery Klet Brda used to generate almost half of its income via exports, but this advantage turned to dust under current circumstances.

The company remains an optimist given foreign distributors' forecasts and first positive signals from the US market.

STA, 3 December 2020 - As part of the latest effort to crack down on money mule schemes in Europe, a total of 81 cases have been investigated in Slovenia, in which 102 money mules have been identified. A total loss by legal entities and individuals of EUR 2.1 million has been prevented, the Bank Association of Slovenia announced on Thursday.

Money mules take part - often unknowingly - in money laundering activities by receiving and transferring illegally obtained money between bank accounts and/or countries.

The sixth European Money Mule Action (EMMA6), coordinated by Europol and involving law enforcement authorities from 26 countries, was conducted between 15 September and 30 November.

It resulted in the identification of 4,031 money mules as part of 1,159 criminal investigations. A total of 422 persons have been arrested in the sting that also involved the Slovenian police.

The operation featured more than 500 banks and financial institutions which helped to report 4,942 fraudulent money mule transactions, preventing a total loss of EUR 33.5 million, the Bank Association of Slovenia said.

According to the Slovenian police, a total of 81 cases have been investigated in Slovenia, in which 102 money mules have been identified.

In cooperation with the Office for Money Laundering Prevention, Slovenian banks and foreign security authorities, a total loss of EUR 2.1 million by legal entities and individuals has been prevented.

Money mules take part - often unknowingly - in money laundering activities by receiving and transferring illegally obtained money between bank accounts and/or countries.

They are recruited by criminals and paid a fee to launder money gained illegally through information or cyber fraud, including breaches into information systems, interception of business correspondence or re-routing of payments.

According to the Bank Association of Slovenia, the message of this year's campaign is that people should be careful not to become a link in a money laundering chain.

"If you think that someone you know is a money mule, inform them immediately about the consequences of their acts," it said, adding that suspicions should be reported to the police and the relevant bank.

The EMMA operation is part of a project implemented within Europol's Cybercrime Payment Fraud Operational Action Plan, which targets cybercrime and money laundering and aims to raise public awareness in these fields.

STA, 2 December 2020 - The Chamber of Agriculture and Forestry of Slovenia (KGZS) has warned that the situation on agricultural markets is deteriorating practically on the weekly basis due to declining purchase prices, with cattle and pig farmers hit the hardest.

Presenting the situation at a press conference on Wednesday, KGZS president Roman Žveglič called on the state and the food industry to take immediate measures, while all stakeholders have been urged to enter talks.

According to Žveglič, the situation is the worst in cattle and pig farming, and since the outbreak of the Covid-19 epidemic also in wine growing and the vegetable industry.

Prospects are not good for the fruit sector either, and the situation may quickly deteriorate in the milk production sector, he added.

The crisis has been the longest when it comes to beef. Purchase prices dropped in April, and there have been no major corrections since, while retail prices have increased.

Currently, the average purchase price for a kilo is around three euros. "In the EU, it is around 3.5 euros, so it is clear what is the amount of loss suffered by Slovenian breeders," he said.

Prices of pork have also dropped, and an additional problem is buyers delaying their purchases. Breeders are also facing the problem of increasing prices of fodder.

The KGZS expects that the food industry will immediately enter talks with their buyers in order to ensure a proper price ratio. "We expect that it will immediately start paying at purchase prices proportionate to their own prices for individual products."

Retailers are expected to reduce imports and prioritise Slovenian products, and the state should also help. "The state should make a comprehensive analysis of the price structure ... and examine possible abuse of power over weaker stakeholders."

The relevant state authorities are expected to carry out thorough supervision over labelling of meat, and to see whether possible unfair practices are conducted in the meat supply chain.

The KZS supports promotion by the state, but the "money for promotion must, at this moment, be exclusively intended for informing consumers about where the food comes from, what its quality is, and whether stakeholders in the food industry are treated fairly."

Žveglič said that farmers were getting desperate and that an increasing number of small farms were thinking about calling it quits. Some of them are taking out loans to cover running costs. "We are at a point when cheap imports may destroy Slovenian farming."

Asked whether farmer protests were an option, he said that talks with stakeholders were planned first. "But if the situation does not improve, this scenario is inevitable," Žveglič concluded.

STA, 1 December 2020 - The Novo Mesto police have concluded a multi-year investigation into a major business fraud scheme in the Posavje and Dolenjska regions. A number of suspects, including companies, face charges for causing damage to creditors, violating basic workers' rights, forgery, and tax evasion, among other crimes.

The head of crime investigators at the Novo Mesto police department, France Božičnik, said at today's online press conference that a total of 1,864 instances of economic crime had been detected during the investigation.

The suspects and some companies conducting 766 crimes systematically, damaging creditors and violating basic workers' rights, including by not paying contributions. Thus, they caused more than EUR 8.2 million in damage.

Police have found that four employers from Posavje and one from Novo Mesto were transferring their operations from their over-indebted companies to new companies with the debts mostly stemming from non-payment of contributions, wages and taxes.

The investigation involved state prosecutors, the Financial Administration, the Novo Mesto Financial Office and the Novo Mesto branch of the Labour Inspectorate.

Police have also found irregularities in family reunification procedures, launched by 62 employees, mostly coming from third countries or Kosovo, with the help of employers. The employees, working mainly in construction and bakeries, were filing requests for family reunification, stating false data on their income.

A total of 1,098 crimes were detected, including notarization of false document, and forging or destroying business documents.

The wages of the employees contained fictitious costs, including unrealistic rises in gross pay, fictitious commuting and travel costs, lunch allowances, performance bonuses and compensation for separation, Božičnik said.

As part of the investigation, police conducted more than 30 house searches and seized a number of documents, electronic devices and other pieces of evidence. The procedures were conducted in cooperation with the Krško and Novo Mesto district state prosecutor's offices.

Božičnik noted that notarization of false document carried a sentence of up to three years in prison, forgery or destroying of business documents was punished by up to two years or up to eight years in case of huge material damage to creditors. Violation of basic workers' rights carries a sentence of up to five areas and tax evasion can be punished with up to eight years in prison.

STA, 1 December 2020 - The Organisation for Economic Co-operation and Development (OECD) has slightly upgraded its forecast for Slovenia's GDP in 2020, projecting that it will fall by 7.5% this year, while also downgrading the expected rebound in 2020, to 3.4%.

In the first half of June, the OECD said that Slovenia's economy was expected to shrink by 7.8% this year, and then grow by 4.5% in 2021.

In the latest report, issued on Tuesday, it says that the effects of the Covid-19 pandemic would continue to disturb economic activity until at least mid-2021.

"From then until the end of the projection horizon in 2022, investment and exports will be the main engines of growth thanks to higher demand in trading partner countries, improvements in the epidemiological situation," the report adds.

The OECD notes that economic activity in Slovenia picked up in the third quarter of 2020, after the end of the lockdown in mid-May. However, the new restrictions introduced in the autumn are affecting economic activity, in particular in services sectors.

"Activity is likely to slow again as the virus spreads. Demand is projected to bounce back in 2021 before receding to a more stable path," the report says, adding that government spending and household consumption would maintain the recovery until the end of 2021.

The export-oriented sectors are expected to benefit from stronger EU demand from 2021, but the outlook is highly uncertain, as a further significant deterioration of the health situation could lead to prolonged restrictions that would stall the economic recovery.

The OECD also notes that unemployment is increasing, calling for reinforced active labour market policies targeted on specific groups, such as long-term and older unemployed persons.

"Government support to households and businesses most affected by the crisis, in particular in the tourism and entertainment sectors, should continue."

The Paris-based organisation also issued a 2022 forecast for the first time, saying it expected a 3.5% improvement compared to 2021.

Overview of latest GDP forecasts for Slovenia

STA, 1 December - The latest macroeconomic forecasts are in broad convergence about the contraction of Slovenia's GDP this year, with the economy expected to shrink by about 7%. A rebound in the 3-5% range is expected in 2021.

GDP growth/time of projection       2020      2021      2022
----------------------------------------------------------------
OECD/December                      -7.5%      3.4%      3.5%
European Commission/November       -7.1%      5.1%      3.8%
IMF/October                        -6.7%      5.2%
EBRD/October                       -7.5%      3.5%
IMAD/September                     -6.7%      5.1%      3.7%
Banka Slovenije/June               -6.5%      4.9%      3.6%
----------------------------------------------------------------

Source: Individual forecasts

STA, 30 November 2020 - Slovenia's gross domestic product (GDP) was down 2.6% year-on-year in real terms in the third quarter, the Statistics Office reported on Monday. In seasonally-adjusted terms, GDP was up 12.4% compared to the quarter before while dropping 2.9% year-on-year.

In the first nine months of the year, Slovenia's economy shrunk by 6% compared to the same period in 2019.

Domestic consumption in the third quarter of 2020 was down by 5% year-on-year, with final consumption dropping by 0.3%, and gross investments by almost a fifth (-19.6%).

The main reason for the significant drop in gross investments was the reduction of inventories, the Statistics Office said.

Exports in the third quarter decreased by 9.5% compared to the same period in 2019, with exports of goods dropping by 4.6% and exports of services by 25.8%.

Imports on the other hand were down by 13.1%, as imports of goods decreased by 11.2% and imports of services by 22.4%.

The decreased volume of travel contributed the most both to the contraction of exports and imports.

The Statistics Office noted that within final consumption in the third quarter, a drop was recorded only in final consumption by households (-0.9%).

"This reduction was less pronounced than in the first two quarters of the year," it said, adding that in the first it was 6.3% and in the second it was 17.4%.

Final consumption by households on the domestic market was down by 6% year-on-year, with a reduction in expenditure for services and fuel contributing the most. Expenditure for durable goods was meanwhile up by 4.3%.

Final consumption by the state was up by 1.4% in the third quarter year-on-year, while gross investments in fixed assets were down by 1.8%.

Investments in machinery and equipment was down, while investments in buildings and civil engineering structures was up by 2.7%.

The number of persons in employment was down by 1.8% or 19,237 year-on-year to 1,034,564.

Year-on-year, Slovenia's GDP in the first quarter of 2020 was down by 2.4%, and in the second quarter it was down by 13%. In seasonally-adjusted terms, it was down by 3.5% and 12.9%, respectively.

In seasonally-adjusted terms at the quarterly level, it was down by 4.7% in the first quarter, and by 9.8% in the second quarter.

Statistics Office analysts expect that at the end of the year, GDP drop will not be as pronounced as in the second quarter. First assessments for the whole year are expected to be published at the end of February.

More on GDP here

Unemployment rate at 5.1% in third quarter, up 0.4 p. p. y/y

STA, 27 November 2020 - The unemployment rate in Slovenia in the third quarter stood at 5.1%, which is on par with the second quarter and 0.4 percentage points more than in the same period last year. The employment rate was 54.9%, a 0.5 percentage points increase on the second quarter and 0.4 percentage points down year-on-year, the Statistics Office said on Friday.

The number of unemployed persons, 53,000, in the third quarter was about the same as in the previous quarter, while compared to the previous year it was higher by 7.7%. The unemployment rate was 4.4% among men and 5.9% among women.

Among the 53,000 unemployed persons, 56% had also been unemployed in the second quarter of 2020, 20% were employed and 24% were inactive.

The number of persons in employment, 979,000, in the third quarter increased by 1% compared to the previous quarter. Among employed persons, the number of student workers increased the most, by 107% (or 13,000 more compared to the previous quarter), followed by the number of employees with employment contracts, by 1% (or 9,000 more).

On the other hand, the number of self-employed persons decreased by more than 8% or by roughly 10,000. Compared to the same period of 2019, the number of self-employed persons decreased by 12%.

Slightly under 20% of what were a total of 859,000 employed persons were absent from work in the third quarter of 2020. 70% were on annual leave, 14% were on sick leave and only 4% were furloughed. In the second quarter, 47% of absent workers, 80,000 in total, were furloughed, while 10% were not working due to paid annual leave.

More on unemployment here

STA, 27 November 2020 - The Constitutional Court has so far received three initiatives to review the amendment to the retail act that stipulates that almost all shops must be closed on Sunday, one of them having been filed by the Slovenian Chamber of Commerce (TZS).

The website of Slovenia's top court shows that three initiatives have been filed against the measure which entered into force in late October after the National Assembly passed the relevant changes in late September.

The exemptions to the blanket ban include shops under 200 m2 at service stations, border crossings, ports, airports, train and bus stations, and hospitals.

Outside these facilities, shops with a surface area of under 200 m2 may be open, but only shop owners, students and pensioners
may work Sundays, regular employees may not.

That the TZS has filed one of the initiatives has been confirmed by its president Mariča Lah, who has told the STA that it was individual companies within the chamber that had opted for the move.

Magistrat International, the company owning the Emporium stores in the BTC shopping district and in the centre of Ljubljana, recently confirmed for the business newspaper Finance that it had filed one of the initiatives.

Lidl Slovenija has meanwhile told the STA that it was still sorting out the details, so it was not able to tell whether it would join the campaign.

The retailer added that it had "very clearly expressed the position that Lidl Slovenija does not oppose the closure of shops on Sundays in principle", and that this had been also discussed with the employees a few months ago.

The company noted that competitiveness on the market should nevertheless be ensured. "This means that the closure should also be in force for all other companies in retail, including petrol stations and bakeries."

The retailer Hofer said that it also intended to file a request for constitutional review, "as we advocate for the conditions for Sunday work to be equal for all stakeholders".

Spar Slovenija said it had participated in the campaign for constitutional review, adding that "it is discriminatory in our opinion."

The TZS believes that the consequences of the Sunday ban will be devastating as the economy is also facing the coronavirus crisis.

Lah has assessed that, as the opening hours have been reduced by 16%, revenue would drop by at least 10% under the assumption that part of, and not all purchases, would be distributed among the remaining days of the week.

STA, 27 November 2020 - Hairdressers and fitness clubs say the government is limiting their business to the greatest extent possible during the lockdown while not offering them enough aid to avoid layoffs and bankruptcies. "We are on the verge of collapse," the two sectors said on Friday, urging dialogue with decision-makers and reopening their businesses.

Both sectors say the aid provided in the stimulus packages so far does not suffice for them to survive, calling for a different approach suited to their specifics.

David Cukjati, the director of Lassana, a leading chain of hair salons in Slovenia, said "the subsidy for furloughed workers covers 80% of the pay and is unreasonably lower than the one for sole proprietors".

Just like in the first wave, they would like to be exempt from paying health insurance contributions and electricity bills, he told the magazine Frizer (Hairdresser).

The sector also expects the coverage of at least part of fixed costs for the period when they are closed if the net loss of revenue amounts to 10%.

Cukjati believes a 40% drop in annual revenue to qualify for fixed costs subsides as set down in the sixth stimulus package is much too high, saying a fair figure would be 20%.

The hairdressers - apart from Cukjati several other representatives spoke to Frizer - also say decision-makers did not consult them a single time during the epidemic or tried to find common solutions to allow them to work.

They stress they cannot offer their services online, and accuse the government of encouraging grey market, which is also less safe and against which the sector had fought for years.

Similarly, fitness clubs - there are over 150 fitness club owners in Slovenia - say that "companies in our sector have already used all their internal reserves".

Fitness clubs largely operate without having permanent employees as they hire freelanced trainers, so pegging aid to the sector to the number of permanent employees is "completely unsuitable", reads today's release from the Chamber of Commerce and Industry's (GZS) new section for fitness, recreation and regeneration.

FURS data show there are almost 4,000 self-employed trainers in Slovenia who provide services worth EUR 78 million, with one trainer working in several gyms in a day.

Fitness centres thus want decision-makers to help them weather the crisis and start thinking about easing lockdown for them as soon as possible.

The release also stresses the great importance of "having a strong sector of fitness, recreation and regeneration in the period after the pandemic".

The hairdressers point out that instead of the government entering a dialogue with the services sector, the sector is now faced with layoffs and bankruptcies.

"If we had taken foreign countries as an example, we would have services provided in a safe manner instead of businesses being closed.”

STA, 26 November 2020 - JYSK, the Danish home goods retail chain, reported record-breaking results in Slovenia in the financial year that ended in August despite the Covid-19 pandemic. Sales revenue was up by 6.6% to EUR 38.6 million, and operating profit rose by more than 20%.

The group's earnings before interest, tax, depreciation and amortisation (EBITDA) in Slovenia increased by 22% to top EUR 5.9m, JYSK reported on Thursday despite the fact that sale moved online during the spring epidemic.

Sales across the country increased the most in furniture and garden furniture, as well as decorations and beds, the backbone of the Danish chain.

Vesna Kukić Lončarić, JYSK's manager for Slovenia, Croatia, Bosnia-Herzegovina and Serbia, said the staff had done a "fantastic job" in these challenging circumstances.

She said JYSK planned to continue to grow in the long-term, which was why it was investing in the modernisation of existing stores as well as opening new ones.

JYSK opened its first store in Slovenia in 2008, and now it employs 185 persons in 22 stores across the country.

Globally, the group has more than 2,900 stores in 51 countries. It posted a record-breaking EUR 4.1 billion in revenue and EUR 489 million in operating profit for the past financial year.