Price contradictions put industry in a precarious spot, says Fevia

By staff reporter

- Last updated on GMT

Related tags: Food chain, Common agricultural policy, European union, European commission

The European food supply chain is being crushed between a hammer and an anvil, according to the Belgian food industry association Fevia, which is setting out to contribute to better understanding between actors and more collaboration.

In its annual report published this week, Fevia said the political situation governing food is causing considerable stress between actors in the supply chain.

On the one hand, there is growing pressure on manufacturers as a result of higher raw material costs. On the other hand, however, they are being pressurised to lower prices of manufactured food for consumers. In Belgium, observers reckon food prices are too high on the supermarket shelves – but according to agricultural organisations they are too low.

“This political situation risks crushing the industry between a hammer and an anvil,”​ says Fevia.

It concludes that, although relations between links in the food chain are not easy at the moment, every link in the chain depends on the other.

Its mission, it says, is to ease relations between actors. While it admits it doesn’t have a magic wand and can’t change the economy, but wants to contribute to better understanding and promote collaboration in the food chain.

European context

The European Commission believes there is need for a fundamental reform in the food chain. The new common agricultural policy, and the progressive reduction in agricultural price supports, have shaken relations between actors in the food chain.

The volatility of agricultural prices, plus the economic crisis, is the source of tension and great uncertainty. The Commission communication last year has already identified that relations are sub-optimal, there is a lack of transparency in prices, and competition is weakening in all sectors.

In particular, the Commission fears that the price of food at the consumption end is increasing faster than can be addressed by economic factors.

The Commission wants to improve supervision of food prices, and reinforce the position of farmers in the negotiations by supporting producers organisations.

Related topics: Policy

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