Emerging economies outstrip EU food sector growth

By Jess Halliday

- Last updated on GMT

Related tags: Eu food, International trade, Eu

Low levels of R&D, high input costs and uneven relations with retailers are amongst the reasons for emerging economies are outpacing growth of the EU food and drink sector, says a new CIAA report.

The Confederation of Food and Drink Industries of the EU (CIAA) last week published its annual Competitiveness Report, available here. http://www.ciaa.eu/documents/brochures/ciaa-comprep-web.pdf​ The purpose of the report is to assess the industry’s performance in the light of political and economic developments.

It said the EU sector has a sold base and “stable but low growth”​ – and has continued to operate well throughout the economic crisis without state support. It is the world’s biggest exporter of food and beverage products. The industry had a turnover of some €965 billion in 2008, and 4.4m employees.

However a number of factors are stymieing its potential, and causing its growth to be outpaced by emerging economies – in particular China and Brazil.

These include low investment in R&D, and competitive issues with retailers that squeeze food manufacturers. In addition, the business environment is highly regulated, labour productivity is lower than in some other parts of the world, and input prices, although currently stable, are high.

CIAA president Jesús Serafín Pérez said: “The EU food and drink industry calls for enhanced political support for the implementation of all actions aiming to increase the industry’s competitiveness as identified by CIAA in this report. For the EU food and drink industry, this is the way forward towards fulfilling the objectives of the EU 2020 Strategy.”

Imports down

The CIAA has flagged up the declining export market share of EU industry on global markets.

“Surprisingly, after eight years of decreasing trade balance, in 2009 the EU food and drink sector registered an upswing due to a sharp decrease in imports during the economic crisis.”

The value of food and drink imports shrunk by over 11 per cent in 2009 compared to 2008, and even more in volume terms. The value of exports dropped by 7.4 per cent while volumes remained the same, as a result of lower prices.

Emerging economies outstrip EU food sector growth

Low levels of R&D, high input costs and uneven relations with retailers are amongst the reasons for emerging economies are outpacing growth of the EU food and drink sector, says a new CIAA report.

The Confederation of Food and Drink Industries of the EU (CIAA) last week published its annual Competitiveness Report, available here. http://www.ciaa.eu/documents/brochures/ciaa-comprep-web.pdf​ The purpose of the report is to assess the industry’s performance in the light of political and economic developments.

It said the EU sector has a sold base and “stable but low growth” – and has continued to operate well throughout the economic crisis without state support. It is the world’s biggest exporter of food and beverage products. The industry had a turnover of some €965 billion in 2008, and 4.4m employees.

However a number of factors are stymieing its potential, and causing its growth to be outpaced by emerging economies – in particular China and Brazil.

These include low investment in R&D, and competitive issues with retailers that squeeze food manufacturers. In addition, the business environment is highly regulated, labour productivity is lower than in some other parts of the world, and input prices, although currently stable, are high.

CIAA president Jesús Serafín Pérez said: “The EU food and drink industry calls for enhanced political support for the implementation of all actions aiming to increase the industry’s competitiveness as identified by CIAA in this report. For the EU food and drink industry, this is the way forward towards fulfilling the objectives of the EU 2020 Strategy.”

Imports down

The CIAA has flagged up the declining export market share of EU industry on global markets.

“Surprisingly, after eight years of decreasing trade balance, in 2009 the EU food and drink sector registered an upswing due to a sharp decrease in imports during the economic crisis.”

The value of food and drink imports shrunk by over 11 per cent in 2009 compared to 2008, and even more in volume terms. The value of exports dropped by 7.4 per cent while volumes remained the same, as a result of lower prices.

Related topics: Market Trends

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