Business Auditors question Agriculture Ministry’s 1.5 billion support for Czech food products
The Czech Ministry of Agriculture may have squandered up to 1.5 billion crowns on ambiguous promotion of Czech food and wine products over the past six years, according to a report by the country’s Supreme Audit Office. Much of the money was allegedly committed without a clear strategy, and in breach of the Czech public procurement legislation.
The Supreme Audit Office has reviewed three major marketing campaigns aimed at promoting Czech food products between 2008 and 2013. The Czech Agriculture Ministry, along with the State Agricultural and Intervention Fund and the Wine Fund, public organizations in charge of sourcing EU funds into Czech agriculture, spent 1.5 billion crowns between 2008 and 2013 on support for Czech farmers and winemakers.
The auditors, however, have questioned the efficiency of the campaigns, and the ministry’s overall strategy. “The auditors see the fact that the goals of the campaigns were often unclear as a key mistake. Many winners were selected without any prior setting of success criteria or those that were to be achieved in the future. It is therefore hard to be sure how much the communication campaigns ultimately helped achieve these targets,” the Supreme Audit Office said in a press release on Monday.
The spending in question is connected to the Klasa, Regionální potravina and Vína z Moravy, vína z Čech designation, created by the ministry in order to promote producers whose foodstuffs or wine products meet the ministry’s criteria for Czech-made products.
The Supreme Audit Office also believes some of the campaigns breached the Czech public procurement legislation; for example from 2009 to 2011, six large and over a hundred small-scale contracts were awarded without a tender. Instead, clients were directly approached.
Invoices seem to have been paid for commissions which were either unfinished or had never even taken place. Public funds were also spent on activities which had never been part of the agreed contract. In total, this amounted to 96.3 million crowns.
As an example the Audit Office mentioned a case where 171 thousand crowns were spent on three press excursions to a milk factory. These trips included spa visits and Indian massages, which led to some articles being written where the Klasa brand was not mentioned even once, according to the report. It goes on to say that the Czech Wine Fund spent over 42 million crowns on promotion without signing relevant contracts between the years 2006-2009.
The audit office’s report comes at a time when a new advertising concepts for the Klasa and Regionální potravina are being created. This was initiated by Agriculture Minister Marian Jurečka who in the past called for the introduction of a long term strategic plan for Czech agriculture. In a reaction to the report, Mr Jurečka said the past funding of the marketing campaigns was the responsibility of his predecessor in office.