The Belgian food industry is facing serious challenges, and the situation calls for immediate attention. Fevia, the federation representing this sector, recently sounded the alarm about potential shifts in food production away from Belgium. They reported stagnating domestic sales and rising imports as major threats.
Key Concerns for the Industry
Fevia CEO Ann Wurman warned that without action, Belgium could lose its food production capabilities. Despite generating around 85.1 billion euros and supporting over 102,000 jobs, the industry is struggling against rising competition from abroad. Particularly, sales of foreign products, especially from the Netherlands, have surged, almost doubling their market presence in the last fifteen years.
In international markets, growth is slowing. Notably, exports to countries outside the EU have stalled, and the outlook in critical markets like the United States is weakening. External pressures, influenced by the rising geopolitical tensions from the Ukraine war and Middle Eastern instability, are contributing to increasing costs.
A Structural Warning Signal
Fevia emphasizes that the current challenges aren’t just temporary. A survey of food companies revealed that they are all feeling the pinch from rising costs, which are hitting profitability and investments hard. Wurman noted, “Companies are absorbing these shocks, but that isn’t sustainable for the long run.”
Urgent Measures Needed
To combat this decline, Fevia is urging immediate action. They propose keeping food affordable by avoiding a VAT increase, which they believe would further drive customers to cross-border purchases. Additionally, they are advocating for lower packaging taxes and regulatory relief to improve the competitive landscape.
Wurman highlighted the need for structural reforms, particularly in wage costs, which are currently over 23% higher than in neighboring countries. To keep production in Belgium, they suggest stabilizing wage indexation and continuing support for night and shift work.
The federation insists that without strategic support from the government to cut electricity costs and simplify regulations, the risk of production moving abroad is imminent.
The Bigger Picture
Experts note that many industries are currently grappling with similar issues. A study by Deloitte found that the global supply chain interruptions post-COVID-19 still affect many sectors, including food production. Countries worldwide are re-evaluating their industrial strategies as they aim for resilience in the face of challenges.
In summary, the Belgian food sector is at a crossroads. The industry’s vitality hinges on immediate and effective measures to ensure its survival. With the right support, Belgium can maintain its pivotal role in the food supply chain, safeguarding jobs and investments.
For more insights into the ongoing challenges faced by the global food supply chain, visit Deloitte’s report.
