“When the market crashes, I am compelled to seek refuge. At 63, that store is my sole source of income. We are not opposed to Lidl, but we must endure,” expresses Jacco Skenderović from Berane to Radio Free Europe.

Jacco is among the 70 entrepreneurs who operate shops in the area that the Municipality of Berane sold to German Lidl.

They have organized several protest gatherings outside the municipality, with the latest occurring on November 12.

The municipal authorities have assumed the responsibility of demolishing all establishments on the land.

Skenderović, along with other shop owners, is endeavoring to arrange a meeting with the German ambassador in Montenegro.

This is merely one of the locations in Montenegro where Lidl has acquired land to construct a megastore or distribution center.

The entry of Lidl into the Montenegrin market has been anticipated for the past three years.

When will ‘Lidl in Montenegro’ arrive? No one knows

In response to a direct inquiry regarding their plans to enter the Montenegrin market, Radio Free Europe did not receive a reply from Lidl Corporation in Germany.

This company operates in 27 European nations and the United States.

They boast over 10,000 stores and employ more than 260,000 people.

Neither the Government of Montenegro nor the Ministry of Economic Development provided an answer to the same query about why Lidl has not yet commenced its operations in Montenegro.

Economic analyst Mirza Mulešković identifies three potential reasons why neither Lidl nor the Government of Montenegro is disclosing the arrival of the retail chain.

“The first reason could be the small size of the market, the second could be the government-imposed margin harmonization, and the third might be that not all planning documentation has been approved for the locations Lidl acquired,” Mulešković notes.

He reminds us that Lidl initiated its expansion in the Balkans in larger countries, such as Serbia and Bosnia and Herzegovina.

“Montenegro is likely to follow due to market size,” he adds.

Previous governments have announced Lidl’s arrival

The entry of one of Europe’s largest retail chains, Lidl, into the Montenegrin market has been delayed longer than other significant capital investments.

Three governments have previously asserted that Lidl’s presence would help lower consumer goods prices.

The initial announcement of Lidl’s entry was made by the current President of Montenegro, Jakov Milatović, during his tenure as Minister of Economic Development.

After a meeting between the former Prime Minister Zdravko Krivokapić and Lidl representatives, Milatović had stated that around twenty stores were to open, creating approximately a thousand jobs.

The subsequent government led by Prime Minister Dritan Abazović also announced Lidl’s entry into the Montenegrin market.

After a meeting with the company’s representatives in June 2022, Abazović proclaimed that the government would “always be a partner to credible foreign investors looking to invest in Montenegro”.

During 2022 and 2023, a significant surge in food prices among existing retail chains in Montenegro has been recorded.

The current Prime Minister, Milojko Spajić, has responded to citizen complaints with the proposed solution of Lidl’s entry.

Mulešković: Investors seek a free market

Economic analyst Mirza Mulešković believes that an increase in the number of retail chains may contribute to a slight decrease in prices.

“When we compare prices in Lidl with those in other regional retailers, while private label products may be cheaper, other products aren’t significantly discounted. Thus, I do not anticipate a drastic price decrease,” asserts Mulešković.

Mulešković identifies governmental decisions over the past two years, intended to restrain administrative actions from further escalating food prices, as one potential hurdle for Lidl’s entry.

“Any imposition of restrictive measures, such as margin limits, results in market complications. Compliance with market economy principles is crucial for both domestic and particularly foreign companies. Margins need to be determined as per market conditions,” Mulešković emphasizes.

He argues that the government’s margin-limiting measures are stifling the market and could negatively influence investor interest in the retail sector.

In Montenegro, five large retail chains are operational, and their total profit in 2023 surpassed €31 million, marking a 60 percent increase compared to the previous year.

Mulešković contends that the existing retail chains will not impede new competitors from entering the market.

“It’s incorrect to claim that current chains obstruct competition; we already have existing foreign and regional retailers. Furthermore, there are no restrictive measures in place to attract foreign investors,” Mulešković states.

Lidl’s land acquisitions have created issues in certain municipalities

Lidl Montenegro Ltd. was established in March 2021.

The company has acquired several properties in Montenegro where it plans to erect facilities.

It is reportedly focused on land in Podgorica, Nikšić, Berane, and Bijelo Polje.

Initial purchases included land at two locations in Podgorica.

In Nikšić, they purchased land and a former administrative building of a bauxite mine for €2.2 million, having previously obtained a spatial plan from the government to facilitate this investment.

Lidl expressed interest in acquiring land in the municipality of Zeta, where a central logistics center could be established.

However, this project encountered an issue regarding demarcation between the municipalities of Podgorica and Zeta, highlighted by Milan Knežević, leader of the former Democratic Front.

In January, Knežević urged Prime Minister Milojko Spajić to address the demarcation issue, as it obstructs investments, including Lidl’s.

The President of the Zeta Municipality, Mihailo Asanović, informed Radio Free Europe that the matter is being resolved with governmental assistance to formalize land ownership.

In August, the Ministry of Spatial Planning approved urban and technical conditions for Lidl’s design in Bijelo Polje.

The primary issues persist in Berane, where shop occupants like Jacco Skenderović are protesting the municipality’s plans to demolish their establishments.

Lidl acquired approximately one hectare of land in Berane for €2 million.

The municipality of Berane stated that the sale was conducted in accordance with the law and with governmental approval.