Recession hits German food industry
countrywide recession continued - a decline which the BVE industry
association claims has already led to the loss of numerous jobs.
German food industry sales dropped by 1 per cent last year as the countrywide recession continued - a decline which the BVE industry association claims has already led to the loss of numerous jobs.
Total food industry sales reached €125.4 billion in 2002, while both the number of food manufacturers and employees dropped significantly as a result of the slide in sales. The number of people employed in the German food industry dropped 3.3 per cent to 529,918, while the number of companies in the sector - the fourth largest in Germany - reached 5,847, some 200 fewer than in 2001.
Sales in Germany in particular were poor during the year, dropping 1.7 per cent to €100.8 billion. Within this, there were steep declines for the milk (-8.2 per cent), sugar (-6.4 per cent), poultry (-5.9 per cent) and fish (-5.4 per cent) processing sectors. On the positive side, there was good growth for the milling industry (+17.5 per cent), the oils and fats sector (+13.3 per cent) and the baked goods sector (+9.6 per cent).
Thankfully for the German food sector, export sales continued to grow, offsetting some of the decline at home. Exports accounted for 19.6 per cent of total sales in 2001, up 0.6 per cent on 2001, while total export sales were up 2 per cent to €24.6 billion.
The other countries of the European Union were the most important markets for German food products in 2002, accounting for 74.8 per cent of volumes. The two most important individual markets are the Netherlands and France. Outside of the EU, the US and Canada account for 3.6 per cent of exports, Africa and the Middle East a further 2.6 per cent and Central and South America just 0.8 per cent. Sales to recession-hit South America dropped 5.8 per cent during the year, the BE said.
Exports to the CIS accounted for 3.8 per cent of the total in 2002, with Russia the biggest individual market in this region. Exports to the Russian market dropped by 9.7 per cent during the year. The organisation remained pessimistic about the prospects for growth in this region in 2003.
But with eight Eastern European countries (Latvia, Lithuania, Estonia, Czech Republic, Hungary, Poland, Slovakia and Slovenia) joining the EU in mid-2004 (along with Malta and Cyprus), the BVE said that the German food industry had significant potential for growth in this region in the future, since most of these countries were already major trading partners of Germany. Exports to Eastern Europe rose 7 per cent to €1.5 billion in 2002, and the BVE is clearly hoping for further growth as those countries prepare to join the trading block.
Commenting on prices, the BVE said that producer prices dropped 0.1 per cent on average during the year, while export prices declined by 0.8 per cent. At the same time, the cost of living in Germany increased by 1.3 per cent, while food and drink consumer prices rose on average by 0.9 per cent.
