Country Focus
July 2010
Letter from the Direct Selling Association
LAST year was an important period for the industry in Croatia thanks to a new bylaw introduced by the government which clearly defines the role of the direct seller and protects both the seller and the consumer.
The Direct Selling Association worked closely with the Chamber of Economy and Ministry of Labour to create this new law, which gives us the first ever legal framework for the industry in this country. The bylaw closely mirrors our own Code of Conduct and is our greatest achievement since the association was formed in 2006.
The law gives added credibility to our way of working and protects both the seller and the consumer. Among other things it requires direct sellers to identify themselves and explain the consumer’s rights before a sale is made.
Having this government backing has strengthened and enhanced the image of the industry which until recently had a poor perception among the public due to lack of understanding and clarity around this method of selling. While our own members have always abided by the code it does now mean that other direct selling organisations have a greater obligation to ensure they operate in an ethical and open manner.
We believe there are around 30 companies operating either partly or wholly as direct sellers and it is our ongoing aim to encourage them to join the Association so we can speak as one voice – there are currently six members. We can offer valuable insights when decisions are being made that might impact our industry, especially as the government strives to harmonise legislation as part of its bid to enter the European Union. The biggest sector is cosmetics and personal care (59 per cent of the direct selling market), with wellness products at 27 per cent and then a mix of clothing, household goods, toys, books and stationery so there is a wide range of good quality goods for all the family.
The economic crisis hit Croatia very hard in the last quarter of 2008, so this new bylaw was an ideal way to raise our profile and promote the business opportunity. Consumer spending fell and while all our members report an increase in enquiries we expect last year’s sales to be lower than 2008 when all the data is confirmed.
While we must be careful not to promise that direct selling can immediately replace a lost job, we all know it is a good part-time activity to get some extra money. We therefore organised a press conference to explain the significance of the bylaw and present the potential, especially during the recession. Guest speaker was Anders Berglund, Vice-Chairman of the Federation of European Direct Selling Associations.
I believe this year will be similar to 2009, with very little improvement as confidence is still low and we have the ongoing challenge of complex tax and legal issues around self-employment which in these conditions is seen as an even bigger obstacle. High levels of tax and other financial burdens are a real threat to future growth and this is an area where the Association, in co-operation with the Chamber of Economy, is planning to focus its efforts in support of its people as we continue to work with the authorities for the common interest.
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