Small and medium-sized companies present themselves under the German flag in a joint stand at foreign trade fairs.
Dusseldorf After two years of trade fair standstill, the federal government surprisingly wants to scale back the promotion of small and medium-sized companies at foreign trade fairs. This emerges from the supplementary resolution recommendations of the Budget Committee. “The planned cuts for 2023 come completely unexpectedly and without consulting us,” said Jörn Holtmeier, Managing Director of the Association of the German Trade Fair Industry (Auma), the Handelsblatt. The association represents exhibitors and trade fair service providers.
Compared to 2020, when 45.5 million euros were set aside for German joint stands in the federal budget, the funds will be reduced by almost a fifth to 36.7 million euros, Auma calculates. With a budget of 43.7 million euros, almost 300 trade fair appearances in 58 countries were actually planned for 2023. The Auma representative wonders in amazement that there has been a cross-party consensus on trade fair subsidies for German SMEs abroad for decades.
“The German pavilions are always a crowd puller at trade fairs,” emphasizes Holtmeier. The federal government bears around half of the direct trade fair costs, the rest is paid by the exhibiting companies. Medium-sized companies appreciate the German pavilions. “Often the joint stand is the only option to be able to take part in the trade fair at all,” says Jörg Schäfer, managing director of jewelry manufacturer Burkhardt + Bischoff from Keltern.
Benedikt Brustmann, managing director of the operating table specialist Brumaba from Geretsried, regrets the planned cuts. He not only appreciates the important financial support: “As a company with 45 employees, it is difficult to find a good location at a trade fair abroad. As a small, medium-sized company, we are also well perceived at the German pavilion.” Business has also benefited from this. “We found new dealers at foreign trade fairs and thus built up our worldwide exports.”
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Trade fair promotion builds exports and jobs
The federal government’s participation in foreign trade fairs provides important impetus. This is proven by an evaluation by the PwC consultancy from 2018. According to this, around 216 million euros in additional export sales and around 372 jobs are created or maintained for every one million euros in tax money.
>> Read here: After a forced break of two years – a summer full of trade fairs creates problems
“A cut is in blatant contradiction to the goals of the federal government and harms medium-sized companies and Germany as a business location,” says Holtmeier. Especially in times of strong geopolitical upheavals in Russia or China, medium-sized companies have to open up new markets abroad. Trade fairs are particularly suitable for this. In the face of the energy crisis, supply chain problems and inflation, export business has become even more important for many companies. “Now the medium-sized companies are getting headwind instead of tailwind from the federal government,” says Holtmeier.
The planned reduction in funding for start-ups is also incomprehensible to the exhibitor and trade fair association. Young, innovative companies receive up to 7,500 euros for participating in a joint stand at a leading international trade fair in Germany. “This has paved the way for a number of start-ups to internationalise,” says Holtmeier. Now the funds will be reduced by a good 400,000 euros to two million euros.
In Germany, after two years of trade fair bans, the industry is slowly starting up again. Over 70 percent of the planned trade fairs were canceled in 2021, even more than in the previous year. According to Auma, this caused economic damage of 45 billion euros. “This year we are still a long way from the level before the pandemic,” says Holtmeier. Foreign trade fairs are important for German medium-sized companies right now, because not all international participants have returned to Germany as a trade fair location. The Bundestag will decide on the plan on Friday. The Federal Ministry of Economics and Technology could not comment on the topic beforehand, a spokesman said on request.
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