Chairman of Cheesemakers' Union: We have a game without rules (video)
According to the State Register, more than 10 000 enterprises and entrepreneurs officially dissolved in Armenia in 2015. During the program “On Paper and in Reality,” Samvel Karapetyan, Founding Director of Business Support Center, said that the figure has gone up this year as compared to the previous years. “The main reason for this is the economic crisis of recent years, the uncompetitive nature of small and large businesses as well as the pressure on small-sized businesses. It can be displayed both in terms of price or quantity of products,” he said. Armen Gigoyan, Chairman of the Cheesemakers' Union of Armenia, says ‘He, who offers good quality and price, will have his offer accepted by others.’ “But if we have a game without rules, than it will have bad consequences,” he said. Mr. Gigoyan says all businesses are under the burden of loans, which, according to the set of agreed criteria, should not exceed 20-30 percent of the working capital of the organization whereas in Armenia the figure stands at 100 percent, if not more. “When the time comes to repay the accumulated debts, a cheesemaker has nothing else to do but lower the price of the product. They face the same problem when the time comes to pay for raw materials. That is to say, cheesemakers often have to lower prices to be able to make payments,” he said. He says the entire market starts to wobble in case of such reductions and there is not a regulator. As a result of these fluctuations, the sphere becomes uninteresting.
