MARKETING COFFEE IN EASTERN EUROPE

This research assesses the prospects of marketing coffee in Eastern Europe. The countries of Eastern Europe of greatest interest in this assessment are Rumania, Hungary, and Czechoslovakia. Included in this assessment are discussions of economics, market size, consumer expenditures, coffee preferences, product distribution and promotion, and foreign exchange controls and import duties.

The collapse of the Communist Bloc in Eastern Europe was widely interpreted as a boon for the economic welfare of all Europe. The Communist collapse, together with the increased economic integration within the European Community (EC) beginning in 1992 as a result of the implementation of the Single Act of Luxembourg, was widely heralded as the beginning of a new economic era for Europe. Lastly, the ratification of the Treaty of Maastricht by the member nations of the EC was expected to usher in a new age of European political unity.

Three years after all of this unbridled optimism surfaced, however, The Economist (1992c, p. 51) referred to Europe as the "nightmare continent." Former Soviet republics are fighting with one another. Ethnic minorities in some former Soviet republics are challenging the new government. The former Yugoslav federation has slipped into a devastating civil war in Bosnia-Hercegovina, where Bosnians, Croatians, and Serbs are all at work killing one another. In Czechoslovakia, a so-called "velvet divorce has been n

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of growth in the East European countries. Hungary, the country with an economy closest to a western model, grew an average of six-percent in the 1971-1975 period, four-percent in the 1976-1980 period, and one-percent in the 1981-1985 period (Economist, 1992a, p. 49). The 1986-1990 period witnessed an average one-percent per year decline in growth, and the decline in 1991 was three percent (Economist, 1992a, p. 49; Economist, 1991, p. 58). Czechoslovakia, whose economy is also considered advance (by western standards) in comparison with other East European economies, also grew at the rate of six-percent per annum (average) in the 1971-1975 period and four-percent in the 1976-1980 period (Economist, 1992a, p. 49). In the 1981-1985 period, Czechoslovakia recorded an average annual growth of two-percent (Economist, 1992a, p. 49). Czechoslovakia continued to grow at an annual average rate of one-percent in the 1986-1990 period; however, a staggering decline of seven-percent was recorded in 1991 (Economist, 1992a, p. 49; Economist, 1991, p. 58). The release from Communism in 1989 has not led to the economic promised land for the Eastern European countries in the early-1990s. Nevertheless, hope for improvement continues to abound

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