Fresh Produce Sector Calls For Action To Soothe Energy Cost Impact

It said that many businesses are at ‘risk of serious economic hardship’, and even bankruptcy, as a result of high electricity and gas prices, which the sector is unable to absorb.

Freshfel Europe said that some fresh produce operators are facing electricity bills up to ten times higher than the previous year, with some parts of the industry hit harder than others. Dutch greenhouse operators, for example, have already warned that their sector faces a challenging winter if energy costs aren’t addressed.

Additional Costs

“We are estimating the sector’s added energy costs to be around €6 billion to €8 billion for the current season, from orchards up to departure of fresh produce at packing stations,” commented Philippe Binard, Freshfel Europe general delegate.

“Besides this, each product category might also have additional energy costs in the chain. For example, should apple storage trends remain unchanged, we have calculated that such added bills could be close to €200 million for the coming season.”

Binard noted that the additional energy costs come on top of other rising costs in the past year for production inputs, services and logistics, which arose out of the COVID-19 crisis.

Price Increases

While other sectors have seen prices inflate by 15% to 20%, to reflect the growing inflationary environment, such increases have not yet been seen in fresh produce, Freshfel said, putting the sector in a challenging position, it noted.

‘This is alarming considering the essential role of fruit and vegetables, part of the solution in reaching EU sustainability targets in the European Green Deal, Farm to Fork Strategy and Fit for 55 Package, and securing the better health objective of the EU Beating Cancer Plan,’ the group said.

In order to maintain the market stability of the sector, Binard called for authorities to make efforts to isolate fresh produce from the impact of rising energy costs.

“Our sector needs to be classified as an essential sector and be excluded from any potential energy cuts,” he said. “This will ensure its ability to perform its essential function in the delivery of quality and safe fresh produce to consumers.”

Food Security ‘At Risk’

In the medium term, Freshfel Europe said that food security is at risk due to ability of growers and traders to be economically sustainable throughout the energy crisis.

“The supply of fresh produce may decrease as growers go out of business, or leave products unharvested as they cannot store them,” said Binard.

“Production in glasshouses may be shortened to limit heating or lighting. Furthermore, lack of proper temperature control puts plants at risk of going dormant, decreasing harvest yields.”