Selling farm products to restaurants and hotels: what buyers ask for and how to start

A kitchen that buys from a local producer wants something different from a market customer: the same goods every week, a price agreed in advance and a document it can show an inspector. This applies to farms, sole traders and small processors around Trebinje, Bileća, Gacko, Ljubinje, Nevesinje and Berkovići who are thinking about a first contract with a restaurant, hotel or guesthouse.

In short

• The buyer expects regularity: an agreed quantity on an agreed day, not a surplus when you happen to have one.
• You keep records of risk-control measures, proportionate to the type and size of your business, for at least three years and make them available to the competent authority and to the food businesses you supply (Pravilnik o higijeni hrane, art. 11).
• For each product the small-producer rulebook names the places of direct sale (the farm, the "domaća trpeza" or home table, events, the local market, door-to-door sale, a local retail establishment, depending on the product, annexes 1 to 3). A local retail establishment (lokalni maloprodajni objekat) is listed for every product, but the rulebook does not say what the term covers. The BiH state Law on Food counts restaurants and catering as retail, while the Republika Srpska Law on Food names retail and catering premises separately. Before you sign, confirm with the competent inspector whether a restaurant or hotel in your area counts as a local retail establishment.
• The kind of invoice you issue depends on your legal form, not on the buyer.

What buyers usually ask for

• Quantity and regularity. A kitchen plans its menu by the week. Offer only what you can deliver and say in advance when your season ends.
• An invoice or other sales document. What you issue depends on whether you are a sole trader, a company or a registered farm. See the Knowledge hub articles on fiscalisation, VAT and income tax, and put the question about your own case to the Tax Administration of Republika Srpska (Poreska uprava Republike Srpske).
• Origin and hygiene information. Tell the buyer who you are, where you produce and how you store goods. Primary producers of food of animal origin record animal feed, veterinary medicines and withdrawal periods. Producers of plant products record the plant protection products and biocides they use (art. 11 paras 3 and 4).
• Clean, labelled goods. For labelling, see the article on labelling home-made food.

What to do

1. Check your status. If you process (cheese, honey, jam, cured meat), your premises must be registered or approved. See the articles on registering food premises and on making dairy products on the farm.
2. Small operators have maximum quantities per product, weekly, annual or both depending on the product (annexes 1 to 3 of the rulebook), and regular delivery to a kitchen may exceed them. Check these limits for your product.
3. Before signing, ask the competent inspector whether the restaurant or hotel you want to supply counts as a local retail establishment for your product. The rulebook on derogations for small operators (SG RS 27/19) does not define the term. Also check whether the rulebook has been amended since.
4. Start with one or two products and one buyer. Agree a trial delivery with no commitment first, then a written agreement.
5. The agreement should state the product, unit of measure, price, delivery days, payment term and what happens when goods do not match the order.
6. Keep a record of what you delivered, to whom and when. Under the derogation rulebook a small operator keeps a written or electronic record of the type and quantity produced, the production date and the place and quantity delivered, and keeps it for two years at the premises (art. 30).

Pricing

Kitchens often ask for a lower price than you charge at a market stall, because they buy larger quantities on a regular basis. Before quoting, work out your cost per kilogram or piece: production, packaging, fuel and the time delivery takes. Do not go below that cost. Fix the price for a period (a season or a month) rather than a single day, and agree how it changes if your input costs change.

Where to go

• Tax Administration of Republika Srpska, for invoices and tax: poreskaupravars.org
• The competent inspection in your municipality or city (Trebinje, Bileća, Gacko, Ljubinje, Nevesinje, Berkovići), to ask whether you may supply a restaurant. Catering and retail premises are supervised by the food inspector (inspektor za hranu), except butcher's and fish shops, which the veterinary inspector supervises. Production, processing and wholesale of food of animal origin are supervised jointly by the veterinary inspector and the food inspector (RS Law on Food, art. 55).
• On AgroTour Connect you send an enquiry to a buyer through their profile. The article on enquiries and partnerships explains how this works.

Laws and sources

• Pravilnik o higijeni hrane (Službeni glasnik RS br. 39/18), art. 11
• Pravilnik o uslovima odstupanja koja se odnose na subjekte u poslovanju sa hranom koji imaju mali obim proizvodnje (Službeni glasnik RS br. 27/19), art. 4, 6, 12, 14, 16 to 23, 30 and annexes 1 to 3
• Zakon o hrani, Republika Srpska Law on Food (Službeni glasnik RS br. 19/17), art. 26 and 55
• Zakon o hrani, BiH Law on Food (Službeni glasnik BiH br. 50/04), art. 3 point 8