Saga about Ivica Todoric …

Ivica Todoric wonders why he is not invited to any political meetings. Why invite him when the state already gives him everything he needs?

Saturday's editions of the leading Croatian newspapers, Jutarnji List and Vecernji List, accidentally or not, published interviews with Ivica Todoric, the king of food and trade. Accidentally or not, both interviews were identical, both mentioning the beginnings of the Agrokor empire, both mentioning the company’s successes, and both quoting Ivica Todoric’s complains on how state leadership ignores him by refusing to congratulate him on a job well done.

- It would have been logical if the president and the prime minister said: “Mister Todoric, Agrokor employs a great number of people, it is successful and you do a really great job.” This would be a great way to acknowledge Agrokor’s success, Croatian king of food says for Jutarnji List.

Agrokor gets incentives every year?

That sentence is peculiar in a way, because everybody in the government knows what the Agrokor stands for. They all know who Ivica Todoric is and they are aware that his empire is great. They are also aware that his entire family lives in the Kulmerovi Dvori hotel and that the entire Radnicka Ulica (Worker’s Street) knows the number of times his private helicopter lands on the mentioned building.

Another thing that everybody is aware of is that the state top, which persistently refuses to invite Todoric to President’s residence, also awards annual agriculture incentives for his company. Everyone is aware of this, just like they are aware that Agrokor is one of the largest importers of food in our country.

To be completely honest, state incentives that Agrokor receives are strictly guarded secret, but the Ministry of Agriculture leaks some information from time to time. This happened last year when it was revealed that Todorić received over 100 million kunas in state incentives. They were distributed in 2007 for factories in PIK Belje, Vrbovec and Vinkovci. Todoric also bought Vukovar VUPIK recently, a company that receives about 20 million kunas in incentives every year.

They import a third of their food

Despite government’s incentives, Agrokor imports one third of its food every year. In the first six months of 2009, they imported 120 billion kunas worth of goods. More specifically, in the first six months of this year, Konzum imported 67 billion kunas worth of products, while the rest of the imports were divided among PIK Vrbovec, Ledo and Zvjezda. According to the same data, Agrokor imported 1.6 billion in agricultural products last year and it was among the top five importing companies in Croatia. Ledo increasingly advertises frozen products using the ‘frozen is healthy’ campaign, but many customers are not aware that many of their items are imported from the Hungary or Poland. In fact, only few of their products are of Croatian origin.

However, Todorić found a sort of justification for this. Jutarnji List journalist describes Todoric’s reaction as they flew over some of Agrokor’s properties:

‘When he flies over the farm, he does not want to see two things. He is incredibly annoyed with small farm fields, and second, he cannot handle empty spaces in his crops. Ivica Todoric considers small private farm lands the main reason why Croatian agricultural production is non-competitive in international market. Empty spaces, on the other hand, are a sign that they have not encountered the modern agricultural machinery just yet: again, another sign of non-competitiveness. He decided to put an end to both of them.

Now, what kind of competitiveness is he talking about here? Is he talking about the current model in which state subsidizes a company as large as his and almost grants him a monopoly of the Croatian market? Is it the model in which he is given affordable lease of agricultural land and supplied with cheap labor?

Croats pay twice for their PIK ham?

This may be oversimplification of things, but it seems that Croatian citizens pay Ivica Todoric twice whenever they buy the famous PIK ham. State takes money from the taxpayers and, using incentives, gives them to Ivica Todoric. After that, taxpayers walk into the Konzum store and pay for his ham once again. From the economical standpoint, this kind of thinking may be loosely grounded, however, it still holds a ring of truth to it. Maybe all other countries subsidize their businesses in this way too?

One well-known Croatian economist warns that this kind of model is not practiced anywhere else in the world, but our beautiful Croatia. He says that governments sometimes intervene to save certain industrial branches, for example, in Britain the state decides to order a couple of warships to assist the shipyard, but it never does something like this.

So why are we using it in our country? Do we also need a reminder that during the import ban from 1990’s, Todoric had exclusive rights to import oil, sugar and flour? This is actually the time when Agrokor began to flourish and this is also the time when the state started giving him incentives.

However, let there be no confusion, no one can say that Ivica Todoric is incompetent as a man or entrepreneur. Other companies were also encouraged by the state, but they failed nevertheless. This still does not mean that such business model is right and morally legitimate. If his company is guided by the capitalist model and it pays its employees in this manner, then it is time for the state to treat it like a capitalist institution - and not a social one.

Todoric and media - a dangerous zone

But there is another story within the story of Ivica Todoriću and Agrokor, and this stroy is perhaps more dangerous. In fact, if you browse the eminent Croatian media, you may notice that you cannot read anything negative about Agrokor. This  is not as harmless as it may seem at first.

For example, it is known that Agrokor allegedly participates in writing the interviews with some of its staff. It is also known that if Todoric stopped cooperating with Jutarnji List, Vecernji List or HTV, these agencies would automatically lose a great source of profits secured by Todoric’s marketing agency, Unex.  

Todoric, allegedly, threatened media on several occasions. He supposedly got very upset when Vecernji List criticized Agrokor’s purchase of Zagrebplakat and when Jutarnji List published a story on Agrokor’s international debts. There is another interesting anecdote about the whole situation. More specifically, Todoric invited news editors to a sort of New Year’s lunch where each of them received a belt as a gift. If the story is to be believed, while giving them the Boss belts, Todoric said that belts can be either squeezed or loosened up. In other words, if you're good, you will receive money from the ads, and if not, the belt will be tightened. If this story is true, and not a figment of imagination from some of the editors who attended the lunch, it is extremely worrying. Yet, at the same time, it puts certain things into perspective.  

It may explain why the former Prime Minister, Ivo Sanader, current Prime Minister Jadranka Kosor, and President Stipe Mesic, never invited Ivica Todoric to the official audience, shook hands with him and said: You, Mr Todoric, are a highly successful businessman and I thank you for that. Thank you for employing so many people, who are paid above the Croatian average, for producing so much food and developing the Croatian agriculture, without our help. You are a wonderful model for other Croatian entrepreneurs.