In light of the recent unprecedented soar in energy prices, Freshfel Europe, the European fresh produce association, has called on authorities across the continent to take action to mitigate the far-reaching impact on the fruit and vegetable sector.
The association says that fresh produce businesses are at risk of serious economic hardship, and even bankruptcy, because of high electricity and gas prices combined with other rising prices of production inputs, services and logistics, which can no longer be absorbed by the supply chain.
The organisation says that all parts of the supply chain, from protected and outdoor growers, through to packers and distributors are affected, with different companies requiring energy for different purposes throughout the supply chain. ‘Outdoor production requires electricity for proper irrigation, indoor production requires temperature management and appropriate lighting,’ Freshfel said in a statement. ‘Packing and storage facilities need to have certain levels of cooling and temperature controlled atmosphere, as do ripening facilities. Logistics and transportation require energy as well. Equally, distribution centres and retailers need to ensure fitting conditions to provide consumers with fresh and safe products.’
The organisation warned that businesses were ‘operating in an unlevel playing field among the different national energy markets in the EU’ with some fresh produce operators facing electricity bills up to ten times higher than the previous year. It warned without action many businesses could face bankruptcy.
Philippe Binard, Freshfel Europe General Delegate commented, “We are estimating the sector’s added energy costs to be around €6,8 billion for the current season from orchards up to departure of fresh produce at packing stations. 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”. These new energy costs come on top of other rising costs for production inputs, services and logistics. Freshfel Europe has previously warned that the sector in the last year suffered annually added costs of around €10 billion last year.